Illustrative stock photo (source: SME)
Slovakia’s middle class owns more wealth than any other middle class in the countries that are members of the Organisation for Economic Cooperation and Development (OECD).
The lower 60 percent of households have one-quarter of Slovak “wealth” in their possession. In the US, the same group of people owns only 2.4 percent, the Hospodárske Noviny daily reported on November 6.
The reason is that in Slovakia, the share of people who have their own real estate is much higher than in other countries. Moreover, two-thirds of households live in their own house or flat unburdened by a mortgage, said Tomáš Meravý, analyst with the MESA 10 research centre.
On the contrary, Slovaks are the worst at saving and making money. One of the reasons behind this is the bad experience with privatisation in the 1990s, Hospodárske Noviny reported.
Slovak middle class is wide
If we divide inhabitants based on their wealth, the majority of them own one-quarter of the total assets. This number may seem small, but the middle class in Slovakia is actually very wide. There are no significant economic differences like in other countries, Hospodárske Noviny wrote.
In Austria, for example, the situation is completely different, where the lower 60 percent own only 8 percent of assets and only 2.5 percent in the US. Although the incomes of Slovak households remain low, the majority owns a flat or a house, said Radovan Ďurana from the economic think tank INESS.
“A very small share of very rich people results in the average wealth in Slovakia to be formed by the middle class, not the rich to an extent,” he added for Hospodárske Noviny.
Slovaks do not invest
While the richest Slovak, who permanently resides in Slovakia, has a fortune of €1.3 billion, the Austrian owner of the Red Bull company has a fortune of €20 billion.
“More than a half of Europeans possess a higher fortune than the average upper fifth of Slovaks,” said Andrej Arady, the analyst with VÚB bank, as quoted by Hospodárske Noviny, adding that Slovaks belong to the European average.
One of the reasons is that the businesspeople have had only 30 years to develop. Besides, Slovaks, neither the richest of them, do not invest in financial assets compared to the situation abroad. In the US, half of the fortune of the richest is comprised of financial assets. It nearly equals zero in Slovakia.
“It is caused by a short period after the fall of communism and the absence of the culture of saving and making money,” Ďurana told Hospodárske Noviny.
