New record of Bulgarians’ savings

published on 7/6/12 11:46 AM

Photo: Yana Mihailova

The Bulgarian households are about to set a new record, regarding their bank deposits. Their overall sum reached the incredible EUR 17 bln., data of the Central Bank of Bulgaria shows. Why is this a record? It is so because the Bulgarians kept in banks EUR 15.8 bln. end-2011. Besides that they hold another EUR 4 bln. in cash money, which is traditionally hidden in personal safes, public vaults, under the bed, in a box, etc.

The Bulgarians’ financial wealth over the first trimester of the year reached EUR 23 bln., data of Industry Watch shows. This includes the population’s deposits, cash money, retirement savings etc. However, the main reason for the growing of this sum are bank deposits that form 70 percent of the overall sum. People deposit their money on a large scale, due to the beneficial interests, offered by Bulgarian vaults. Thus the profit of Bulgarian households only from the deposit interests for last year exceeded EUR 600 mln. In other words, the Bulgarians’ financial wealth reached the record 40 percent from the GDP. Bulgaria is among the EU member-states, where the financial wealth increases faster. On the other hand we are still poorer than the average European, since the Bulgarians own only 1/9 of the average wealth for the European community. We have to mark in that comparison that the influence of the richest countries, such as Germany and France should be mentioned here and those have the biggest population too.

Experts say that the reasons for the record growing of bank deposits are hidden in the times of crisis and uncertainty that we live in. Thus saved money can help in different moments. On the other hand households shrink their consumption more and more, postponing durable purchases, such as cars, furniture or repairs for better days. The high deposit interests offered by Bulgarian vaults also attract our money. The households also abstain from taking new loans and the burden of new financial obligations. Thus fresh money is set free and those can be put in a bank deposit with high interest. A large number of Bulgarians that invested in real estate till recently now sell these properties or avoid buying new ones. So the money saved is kept again in bank deposits. This can be clearly seen by the increasing of the big deposits, exceeding EUR 50,000.

However, the savings are not balanced at all. Those households that are more seriously struck by the crisis save less, since their income barely cover the expenses for the house, the children or for food. This on the other hand is compensated by the increasing of the incomes of another part of the Bulgarians, who can not only save, but also benefit from their bank deposits.

Branch experts state categorically that the trend will be kept in the future too, since a stable growth of deposits by some 12 percent annually has been observed over the past three years. Despite the gradual reduction of the interest, it remains high on the average for the EU. At the same time the increased savings of the population give clear signal for both the expectations for the Bulgarian economy and the shrinking of the consumption in the country.

English version: Zhivko Stanchev

По публикацията работи: Tania Harizanova

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New record of Bulgarians’ savings

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