Net household savings 5.6% of GDP in Q1

The net lending capacity of households - their net financial savings ratio - reached HUF 364 billion in nominal terms, or 5.6% of GDP in the first quarter of 2013, the National Bank of Hungary (MNB) said in a first reading of financial account data on Friday. The Q1 savings ratio dropped from a seasonally high 7.2% in Q4 last year and rose from Q1 2012. It was the highest Q1 ratio recorded since 2009. Excluding seasonal factors, the ratio rose slightly between the two quarters, from 5.6% in Q4 to 5.7% in Q1, but dropped from a 6.6% ratio a year earlier. Q1 net savings exceeded the HUF 240 billion net general government financing requirement in the period. The savings have been sufficient to finance the period's general government deficit or more since the last quarter of 2011. Net savings totalled HUF 1,547 billion, and the net saving ratio was 5.5% of GDP in the four quarters ending Q1 2013, slighty rising from 5.3% in 2012. Households invested another HUF 185 billion in government securities in Q1 and purchased HUF 274 billion investment fund units, while they withdrew HUF 127 billion from banks' deposits, almost all from foreign currency deposits, perhaps reacting to the weakening of the forint. Business holdings on the whole little changed. Insurance savings rose HUF 26 billion and their cash holdings fell HUF 68 billion in three months. Households repaid little more than HUF 150 billion in loans in Q1. They repaid HUF 23 billion forint mortgages and HUF 27 billion FX mortgages, HUF 63 billion in FX consumption loans and HUF 36 billion in FX loans owed to non-bank financial businesses. They cut their other debt by HUF 75 billion. Households saved gross HUF 137 billion and repaid HUF 227 billion in debt in Q1, but their assets rose 460 billion on HUF 322 billion in revaluation – including the weaker forint as well as price gains on business stakes.