SLOVAK households saved more during the crisis year of 2009 than before the recession began, according to a study conducted by the Finance Ministry's Financial Policy Institute.
“The main features of the global economic crisis in 2009 were a decline of efficiency in the country's economy, falling employment and dropping real disposal income,” the SITA newswire wrote, quoting from the report. “Nevertheless, [Slovaks’] savings rate surprisingly edged higher, which made the fall in the living standard sharper than indicated by the drop in incomes.”
The crisis also influenced the structure of household expenditures when, in line with predictions, consumption of durable goods and nonessential services fell.
In 2009, Slovaks’ rate of savings was above what was estimated as a balanced level, meaning that households saved more than economic fundamentals would indicate.
The reason attributed to this was economic uncertainty and negative expectations regarding future income, underlined by the significant impact of the rising unemployment rate on households’ short-term time horizon.
