Spectator on facebook

Spectator on facebook

BUSINESS IN SHORT

Household debt lowest in eurozone

SLOVAK households are among the least indebted in the European Union. The National Bank of Slovakia (NBS) presented this fact in its Biatec banking journal in February, attributing this to the short history of the household loan market that began to develop here only as recently as 2003.

SLOVAK households are among the least indebted in the European Union. The National Bank of Slovakia (NBS) presented this fact in its Biatec banking journal in February, attributing this to the short history of the household loan market that began to develop here only as recently as 2003.

“Since then households’ debt has been growing faster than the Slovak economy, as well as households’ income and savings,” the central bank commented.

In spite of rapid growth in loans, the volume of retail housing loans as a proportion of the country’s gross domestic product remains one of the lowest in the eurozone. Similarly, the average loan amount per citizen is the lowest within the eurozone. The central bank ascribed this not only to the low penetration rate of loans but also to lower average household income, which does not permit Slovak households to take loans in amounts typical for countries with higher incomes.

Housing loans dominate the Slovak loan market, making up about three-quarters of all loans. This is slightly below the EU average but above the average in central and eastern Europe.

Although overall indebtedness from retail-type loans as a percentage of GDP is lower in Slovakia than the EU average, the cost of servicing these loans makes up a significant portion of household expenses and the NBS wrote that considering the country’s average interest rates, Slovakia is the “most expensive country" for these kinds of consumer loans within the eurozone.

The processing of personal data is subject to our Privacy Policy and the Cookie Policy. Before submitting your e-mail address, please make sure to acquaint yourself with these documents.

Topic: Finances and Advisory


Top stories

Czech PM files lawsuit against Slovakia at ECHR

Czech Premier Andrej Babiš sues his homeland in the European Court for Human Rights in connection with records proving his collaboration with the communist-era secret police.

Andrej Babiš

Revitalised industrial building offers work, entertainment and housing

Mlynica is an excellent example of successful conversion of unused industrial building.

Mlynica

Youngest Slovak village is a "communist dream come true” Photo

Dedina Mládeže (The Youth Village) was a mere experiment during the communist era. Now, the still inhabited village has morphed into an open-air museum.

Dedina Mládeže

What are the reasons behind low wages in Slovakia?

The average wage costs per Slovak employee accounts for only 44 percent of the EU average.