Household debt in Malaysia: an analysis on macroeconomic variables / Nurul Syaznirah Taharudin

In Malaysia there are two concerns related to debt have often been discussed. One of the debts are household debt, mainly for housing and purchase of a personal car, which contribute about 80 per cent of the gross domestic product (GDP). The expansion of loans has led to the rise of household debt and it has been an increasing trend since the early 2000s. The increase in Malaysia’s household debt has risen to 84% of total GDP in 2017. However, in the third quarter of 2018 Malaysia’s household debt has fall to 83.2% (Bank Negara Malaysia, 2018). The purpose of this study is to examine the impact of household debt in Malaysia using time series data. This study employs the ordinary least square (OLS) method and the macroeconomic variables used consist of gross domestic product, consumer price index, interest rate, housing price index and unemployment as independent variables taken in the period from 2003 to 2018 annually. The finding shows that GDP, house price index, interest rate and unemployment rate have negative significant with household debt.