High Savings Rate of Hungarian Households Well Over Average for Region
- 13 Nov 2024 7:18 AM
Hungarian households' high savings rate and net financial assets, well over the average for the region, are a "growth reserve" for the national economy, if they can be channeled to corporate financing, Barnabas Virag, a deputy governor at the National Bank of Hungary (NBH), said at a conference organised by the Budapest Stock Exchange.
Hungarian households' net financial assets exceed the equivalent of 110pc of GDP, 24pp over the regional average, Virag said. Excluding stakes in businesses, those assets come to EUR 140bn-150bn, he added.
Hungarian households' net savings rate, at 6pc of GDP, is double the EU average, he said.
Virag added that the system of financial institutions could play a "key role" in channeling those savings to companies and investments.
Investment of household savings in successful Hungarian companies can ensure the country's economic development in the long term, he said, adding that households held HUF 13,000bn of foreign shares and securities, according to NBH estimates.
He said the some 1,100 innovative and export-oriented companies that accounted for 13pc of exports and 22.8pc of economic growth were a "breakout opportunity".
Virag warned that generating excessive demand while there was full employment on the labour market could raise inflation, which had to be "strictly avoided". He added that the foundations for sustained economic growth could only take shape amid low inflation.
Richard Vegh, the CEO of the bourse, said an underdeveloped capital market was one of the main reasons Europe was behind its peers in terms of competitiveness, citing the Draghi report. He added that there had been a bull market in Budapest since early 2023 and the bourse's main BUX index had peaked again during the week.
Levente Szabo, the deputy-CEO of MBH Bank, Hungary's second-biggest commercial lender, said the local lending market could grow by around 4pc this year, in tandem with the pace across Europe.
Source:
MTI - The Hungarian News Agency, founded in 1881.
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