1. SAVINGS
DEPENDENCY
ARE THERE
MEANINGFUL
RELATIONSHIPS?
MBA PT ‘14 GROUP G

2. DEPENDENCY
RATIO
Dependents less likely to have the necessary
means & motivation for accumulating savings
% INFLATION
GROWTH
Consumers likely to spend more now if they
expect prices to rise in the future
SAVINGS
POSSIBLE SOCIOECONOMIC FACTORS THAT INFLUENCE SAVINGS RATE

3. Y = - 0.713 X + 11.679
Adjusted R² = 0.066
0.00
5.00
10.00
15.00
20.00
25.00
30.00
-2.00 0.00 2.00 4.00 6.00 8.00 10.00 12.00 14.00
SavingsRatio(%ofdisposableincome)
Inflation - % growth
CROSS-SECTION REGESSION ANALYSIS (50 ECONOMIES IN 2012) - % INFLATION GROWTH
4.6%, 27.2%

4. CROSS-SECTION REGESSION ANALYSIS (50 ECONOMIES IN 2012) - DEPENDENCY RATIO
Y = - 0.248 X + 21.317
Adjusted R² = 0.218
0.00
5.00
10.00
15.00
20.00
25.00
30.00
10.00 20.00 30.00 40.00 50.00 60.00 70.00 80.00 90.00
SavingsRatio(%ofdisposableincome)
Dependency Ratio
25.3%, 27.2%

5. INITIAL HYPOTHESIS: National Savings Ratio likely to increase over time
Average monthly wages in Singapore (1992 to 2012)
Annual change on Consumer Price Index (1992 to 2012)
Growth in income
outstrips prices
increases over time
Higher potential for
savings, assuming
that household
expenses grow with
the rate of inflation

6. Y = 0.398 X - 768.591
Adjusted R² = 0.392
17.0
19.0
21.0
23.0
25.0
27.0
29.0
31.0
33.0
1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
Savingsratio(%)
TIME-SERIES REGRESSION ANALYSIS (SINGAPORE, 1991 - 2012)
1997 Asian
Financial Crisis

7. TIME-SERIES REGRESSION ANALYSIS (SINGAPORE, 1998 - 2012)
Y = - 0.206X + 443.443
Adjusted R² = 0.680
27.0
27.5
28.0
28.5
29.0
29.5
30.0
30.5
31.0
31.5
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
SavingsRatio(%)
Predicted Savings Ratio of
28.765% for 2013

8. KEY TAKEAWAYS
Savings ratios tend to decrease with rising
dependency ratios & rising % inflation growth
Careful selection of data to improve the reliability of
time-series regression data points used for
momentum forecasting