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Net household savings ratio rises for first time since 2015

Hungaryʼs rolling four-quarter net household financial savings ratio rose to 4.6% of GDP in the third quarter of 2017, up for the first time since 2015, show preliminary data released by the National Bank of Hungary (MNB) and cited by state news agency MTI last Friday.   

The four-quarter ratio rose from 4.3% in the previous two quarters, but was down from 4.9% in the four quarters ending Q3 2016.

The rolling four-quarter savings ratio bottomed out at 0.6% at the start of the global financial crisis in Q3 2008, then rose to hover between 5% and 5.5% between 2011 and 2014, rising to a peak of 7.7% of GDP in 2015. A gradual drop followed as personal consumption rose with a sharp rise in real wages and rising employment in the past 3-4 years.

In nominal terms, net financial savings for the four-quarter period to Q3 2017 reached HUF 1,697 billion, preliminary figures show.

In Q1 alone, households made net savings of HUF 372 bln, or 3.9% of quarterly GDP. If adjusted for seasonal factors, the Q3 savings ratio was 5.0%, up from 4.8% in Q2 and the highest ratio since Q1 2016.

Households made gross savings of HUF 340 bln in Q3, HUF 137 bln more than one year earlier, while increasing their liabilities by HUF 28 bln, HUF 20 bln more than in Q3 2016. Net savings rose HUF 118 bln in one year to HUF 372 bln.

Little more than half of the Q3 savings went into government securities, mostly bonds. Retail savings in government securities reached HUF 1,961 bln at the end of September, up HUF 547 bln in one year.

Some HUF 71 bln of Q3 savings were in cash and another HUF 14 bln in bank deposits. Households held HUF 12,315 bln, more than one quarter of all their financial wealth, in these two instruments, of which cash slightly surpassed HUF 4,000 bln.

A total of HUF 19,382 bln, or 41.4% of total household wealth, was held in shares or stakes at the end of Q3. The total included HUF 686 bln in listed shares and HUF 4,125 bln in investment fund units.

On the liabilities side, households borrowed a net HUF 70 bln in Q3, including HUF 61 bln in home loans. Home loan borrowing doubled from Q2. Consumer loan borrowing, on the other hand, dropped to HUF 23 bln, down from HUF 42 bln in the previous quarter.