THE more frequent and pronounced swings in recent years in the economy has led to consumers turning more cautious in their spending behaviour, even though the net worth of households continues to hold up. Interestingly, household deposits also continue to increase despite the low interest rate environment.
In its report on How important is the wealth effect on consumption? CIMB Research said private consumption had become increasingly correlated with stock market wealth, and that deeper financial markets with more instruments provide greater access to wealth.