The determinants of household and private savings in Thailand

A broad set of possible determinants of household and private savings behaviour is examined through an in-depth case study of Thailand during the period 1960 to 2004. Results suggest that an increase in economic growth, inflation and terms of trade all have a significant positive impact on household and private saving rates. In contrast, the availability of bank credit tends to reduce household and private saving rates. While an increase in both old and young dependency has a negative impact on household and private saving rates, the magnitude of the impact on the former is far greater than that on the latter. Furthermore, public saving seems to crowd out household and private saving, but less than proportionately. This reflects a possible role of fiscal policy in increasing national savings in the economy. Over and above these variables, corporate saving is another important determinant of household saving. An increase in the former brings about a significant reduction in the latter.