Drivers of Private Consumption in Singapore

Private consumption ratios differ markedly across advanced economies, with Singapore recording one of the lowest of its peer group. Using a sample of 31 advanced economies and a rich set of potential drivers, the analysis finds that slow-moving structural factors like demographics, economic structure, and development levels are important correlates of these differences, while cyclical factors appear to play a more limited role. Relative to other advanced markets, Singapore’s lower old age dependency ratio, lower labor share, high real GDP per capita, and role as a financial hub all weigh on its consumption ratio.