In Singapore, this is much less prevalent. If we can make it easier for our women to return to the workforce after they have had their children, we can narrow the gender gap vis-à-vis the advanced economies. This slide demonstrates another thought experiment: assume we narrow our gender gap from the current 15% points to 11% points by 2035 – approximately the level seen in Germany and Netherlands. This will only translate into a cumulative labour force increase of about 2% in 2035. 7 / 17  BIS central bankers' speeches  The demographic trilemma presents the constraints and choices facing us. We can soften it by raising the TFR and LFPR. Of course, having babies or returning to work are deeply personal choices. No one makes these choices in order to boost labour force growth or GDP growth, and we should not suggest doing so. The Government tries to facilitate fertility and labour force participation because that is what many people desire for their own fulfilment. Many women would like to return to work, but they face a number of constraints. We must make it easier for them to do so. The government has made significant efforts in recent years to invest in childcare and facilitate more flexible working arrangements. We must continue to push on this front and collectively as a society enable more who want to work enter the workforce.
Investment has begun to rise, albeit at a slightly later stage than we had assumed. However, it is unlikely that the problem of a low investment rate now is connected to interest rates being too high. Given the low interest rates we see now and the good access to credit in the financial system, financing costs can hardly be regarded as a factor holding back investment. With regard to households, it is possible that even lower interest rates could make them increase their debt burden and borrow in order to increase consumption, but to me this is not an obvious conclusion. In addition, there are risks here. This brings me onto the question of how households have reacted to the low inflation and low interest rates, and this issue deserves more detailed discussion. Households’ growing debt burden and rising house prices In recent years, households’ debt burden has increased gradually and now amounts on average to 125 per cent of their annual disposable income, which is almost as high as immediately prior to the property crisis in 1992. However, interest payments are now less than half what they were then, approximately 4 per cent of disposable income. The fact that households are loaning at an increasing rate, both in Sweden and many other countries, can be regarded partly as an adjustment to lower inflation, which is also expected to be permanent.