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Hungary’s net savings ratio rises to 3.2% of GDP in 2009

The net financing capacity of households, or net household financial savings reached HUF 835 billion or 3.2% of GDP in 2009, according to preliminary figures published by the National Bank of Hungary (MNB).

The savings ratio rose from 1.2% in 2008 as the financial crisis encouraged the propensity to save while making people less willing to borrow and banks less willing to lend. The 2009 savings rate was the highest annual ratio registered since 3.3% in 2006.

The net financial savings ratio bottomed out at 0.1% in 2003, rose to 4.3% of GDP in 2005, and fell each year until 2008 before rising in 2009.

In Q4 2009 alone, net savings totaled HUF 421 billion and the savings ratio was 5.9% of quarterly GDP.

On an unadjusted basis, Hungarian households were net borrowers in the first three quarters of 2008 before the savings ratio jumped to 7.3% of GDP in the already crisis-ridden Q4 2008. The ratio fluctuated between 4.3% (in Q1) and 0.8% (in Q2) in the first three quarters of 2009 before jumping to 5.9% in Q4.

The Q4 2009 ratio was boosted, however, to a large part by seasonal factors as savings tend to be high in the last quarters.

Calculated on a seasonally-adjusted basis, the Q4 net savings ratio was 2.4% of the respective GDP, down from 3.9% in Q3, and the lowest quarterly ratio last year.

The seasonally adjusted ratio jumped from 0.7% of GDP in Q3 2008 to 3.1% in Q4 2008, peaked at 4.0% in the first quarter of 2009 but dropped back to 3.0% in Q2 last year. (MTI - Econews)