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Four-quarter net household savings ratio falls to further in Q1

Hungaryʼs rolling four-quarter net household savings ratio fell to 4.4% of GDP in Q1, preliminary data released by the National Bank of Hungary (MNB) yesterday shows, Hungarian news agency MTI reported.

The ratio peaked at 7.8% in 2015 and has been steadily dropping since then. The preliminary Q1 four-quarter ratio is the lowest since Q4 2011. 

The gradual reduction of financial savings could reflect rising personal consumption, after a sharp rise in real wages and rising employment in the past three-to-four years.

In nominal terms, net financial savings for the four-quarter period reached HUF 1.544 billion in Q1, the lowest level since Q4 2013 according to the preliminary figures.

In Q1 alone, households made net savings of HUF 349 bln, or 4.3% of quarterly GDP. If adjusted for seasonal factors, the Q1 savings ratio was 4%, the lowest ratio in the past seven years, except for three individual quarters.

Net household savings dropped HUF 77 bln from Q1 2016 as gross savings rose HUF 20.5 bln and gross liabilities rose more: by HUF 97.5 bln in the period.

Households mainly boosted their savings in government securities, mainly long-term, in the quarter, the MNB said. They also invested in listed shares and other ownership stakes, partly because of a mandatory capital raise due at limited partnerships. At the same time, savings in deposits dropped and households were net sellers of bonds issued by lenders and mutual fund units.

On the liabilities side, the stock of household loans rose slightly in Q1 as retail borrowers made net repayments on property loans but borrowed consumption and other loans, the MNB said.