Slovaks currently save too little

The country is below the European average in savings but this could change for the better in the future.

(Source: Sme)

Slovak citizens save too little, only putting aside €9 out of each €100 earned. Compared to other Europeans, this is not much and financial assets per capita are only €12,300 – which is one third less than the Czechs or Hungarians. In the eurozone, the average citizen has five times more assets, more than €68.000.

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“We should change this situation in the upcoming years, but this will only be possible if we start considering new ways of investment,” macro-economic analyst for the VÚB bank, Andrej Arady, said on October 17 as quoted by the TASR newswire. “During the next five years, the total savings of Slovaks could increase above the level of €18,000 – i.e. to the current level of the Czech Republic.” He added that investors are optimists, as indexes reflecting expectations of production outputs show; and the index of fears is one of the lowest.

The reasons and the way out

Slovaks cite low earnings as the reason behind poor levels of savings. Arady opines, however, that even without further income growth, savings in Slovakia should go up.

The issue is rather, he said according to TASR, that Slovaks tend to focus on keeping the value of their savings than on the rate of their appreciation. “We are rather conservative when managing free financial resources,” Peter Margetiny, specialist of the saving-management company, VÚB Asset Management, continues, “and we fear losing part of, or the whole investment.”

Thus, Slovaks keep most of their money in current or savings accounts, or in fixed-term deposits.

To protect their money from inflation and keep its value, they would have to change from savers to investors and not wait until they earn thousands of euros a month, Barbora Štubňová of the investments' department of the VÚB told TASR. The change of mind-set is more important than the sum itself, as people can start investing even with small amounts.

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