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Net household savings at 0.5% of GDP

Net household savings in the twelve months to the end of Q3 2008 reached 0.5% of GDP, financial account figures published by the Hungarian Central Bank (MNB) on Monday show. The ratio is down from a preliminary 0.6% published on November 17.

The Q3 savings ratio is well under the 1.1% ratio in the twelve months to the end of Q2, and it is the lowest twelve-month figure measured since the twelve months to the end of Q2 2004.

In Q3 alone, Hungarian households were net borrowers to the tune of HUF 144 billion or 2.1% of the quarter's GDP. The figure was revised downward from a preliminary 2.8%. The unadjusted figures show households were net borrowers in each of the first three quarters of 2008.

Even after adjustment for seasonal changes, households were net borrowers in Q3, for the first time since Q3 2003. Households' adjusted net borrowing came to 0.3% of GDP in Q3.

In Q3, most household savings went into fixed forint or foreign currency deposits or pension funds, while there were withdrawals from sight deposits, government securities and investment funds. Long-term borrowing in foreign currency continued to account for most liabilities-related transactions.

Households saved gross HUF 214 billion in Q3, HUF 127 billion less than in Q2 and HUF 155 billion less than in Q3 2007.

Gross borrowing totaled HUF 358 billion in Q3, down HUF 52 billion from Q2 but just HUF 12 billion less than in Q3 2007. Borrowing in foreign currency totaled HUF 375 billion in Q3, slightly down from the previous quarter but HUF 48 billion under the figure in Q3 2007.

The weakening of the forint raised the value of household debt on foreign currency-denominated loans by HUF 232 billion in Q3. It raised the forint value of their foreign currency cash and deposit holdings by HUF 54 billion.

Debt on foreign currency-denominated loans totaled HUF 5,498 billion and accounted for 60% of all household liabilities at the end of Q3.

Gross household debt totaled HUF 25,098 billion at the end of Q3, up HUF 442 billion from three months earlier. Gross liabilities rose HUF 590 billion to HUF 9,166 billion.

Net household financial assets stood at HUF 15,931 billion at the end of Q3, down HUF 148 billion from three month earlier. (MTI – Econews)