Examining the Macroeconomic Effects on Household Debt in Malaysia
摘要
Household debt significantly influences economic and financial stability. This study examines the impact of macroeconomic determinants such as gross domestic product (GDP), interest rate, inflation, unemployment rate, household consumption expenditure, house price index, and savings on household debt in Malaysia. The analysis utilized data from the Central Bank of Malaysia (BNM), the Department of Statistics Malaysia (DOSM), macrotrends and trading economics databases spanning from 2011 to 2023. The autoregressive distributed lag (ARDL) model using EViews 12 was employed to analyse the short- and long-run impact between the observed variables. The results suggest that the macroeconomic determinants such as interest rates, inflation rates, household consumption expenditure, and savings had a significant and positive effect on household debt, whereas GDP and unemployment rate had a significant and negatively effect on household debt. Nonetheless, house price index was found to be insignificant towards the household debt in Malaysia. The error correction term (ECT) was found to be significant and negative, indicating a long-term relationship between the explanatory variables and household debt. This research offers valuable insights for policymakers, emphasizing the need for responsiveness and actions to the rise in household debt that can lead to debt trap among the borrowers in Malaysia and further effect the economic well-being of the society.