The wealth of Bulgarian households

published on 11/25/11 1:21 PM

Photo: Tanya Harizanova

The total wealth of the Bulgarians in 2011 has reached over 70 billion euro, as a major part of it is real estate. The financial wealth has reached 20 billion euro, as bank deposits are 15 billion euro, data by Industry Watch shows.

What are the world trends?
The financial crisis has severely affected the revenues in a number of countries, as well as the wealth of households. As the Swiss franc marked a record growth, the Swiss households turned out to be the wealthiest on the planet with an average wealth of 430,000 US dollars per person. This makes the Swiss two times wealthier than the people in the US and Canada. However, households in North America are two-times wealthier than the average European.

What is the situation in Bulgaria?

The wealth of the average Bulgarian equals 8,000 euro, which is one-ninth of the average European level. This places Bulgaria at the bottom of the EU chart. In comparison to European countries outside the bloc, Bulgarians are wealthier than the citizens of Bosnia and Herzegovina, Albania, Belarus, and Serbia. Russia is considered one of the fastest developing countries, with at the biggest number of billionaires, together with Brazil, India, and China. However, the average Bulgarian is also wealthier than the average Russian.

What is the difference between the average Bulgarian and the average EU citizen?

70% of the wealth of the Bulgarians is real estate, which is not the case in the EU where such property is a small part of the wealth. Bulgarians keep 86% of their money in cash or bank deposits. This is a characteristic feature of the Bulgarians who are skeptical about new financial instruments and have conservative attitude towards financial risks. Bulgarians prefer to keep cash money but this way they become more vulnerable to worsening of the debt crisis in Europe.

Growing bank deposits is a characteristic feature of the Bulgarians, who like to save money for rainy days.

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“The growth of bank deposits is caused by the insecurity at the labour market, which makes households shrink their consumption and save more,” Asenka Hristova from Industry Watch says. “The higher interest rates and the reduced consumption also affect bank deposits. The current crisis in Bulgaria has different effects on the households. Those who are worst affected by the crisis withdraw their deposits, while those who are less affected start to save more.”

But how do deposits bring incomes to the households? Asenka Hristova told us more:

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“We have observed a 12% annual growth of deposits for the past 3 years. More than 600 million euro is paid in interest rates to people. Interest rates remain high and the trend is expected to continue. However the situation with bank deposits shows that people have more optimistic expectations about the economy in comparison to 2009 and 2010.”

Author: Tanya Harizanova
English: Alexander Markov

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The wealth of Bulgarian households

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