- Political stability
- Fiscal affairs
- Monetary policy
- Regulated markets
- Privatisation
- Macroeconomic developments
submited on 28.03.2013 in category Monetary policy | Macroeconomic developments
Household financial wealth exceeded BGN 50 billion, increasing by 12% year over year in 2012. Households generally refrain from taking on new responsibilities, but instead pay back the accumulated debts to banks, leasing companies and fast-lending entities. Thus the general obligations of the population to financial institutions decreased by BGN 400 million during the year. The net financial wealth, which takes into account the accumulated debt, increased by BGN 5.7 billion in the past 12 months.
Two thirds of the increase in financial wealth is attributable to bank deposits. Bulgaria continued to accumulate savings in banks at a relatively fast pace of 11-12% in early 2013. Due to the new tax rate on time deposits, their growth slowed to 5% in early 2013 to avoid interest taxation, as more households turn to demand and savings deposits, which increased by 15% and 34% y-o-y, respectively. The interest of households toward mutual funds is also intensifying in the fourth quarter of 2012.
House prices fell again in the fourth quarter of 2012 – down to € 447 per sq.m. on average. Since the onset of the crisis real estate prices have declined cumulatively by 38%. Still there is no permanent stabilization of property prices. The inflow of foreign capital remains weak while mortgage activity is weak. Affordability of housing for people with steady jobs and stable income is improving. The purchasing power of average monthly wages, measured in square meter of residential area, has increased by 10% within a year.
As a result of the consecutive drop in property prices, the cost of urban housing in the country decreased by BGN 2.1 billion in 2012 – down to BGN 139 billion. Because of the growth of financial savings aggregate (financial and housing) wealth of the population increased by BGN 3.2 billion last year to nearly BGN 190 billion at the end of 2012.
Industry Watch disseminated among its subscribers the regular report "Personal Assets in Bulgaria: Financial wealth and housing market, Q1 2013". Here are the main highlights of the report.
In 2013 Industry Watch will work for 10th year in favor of the Bulgarian business. And the world, Europe and Bulgaria will enter the 5th year of the global financial crisis. The dynamics of the economies, however, is diverse - some countries are just initiating the necessary reforms, others quickly adapted. In this situation, the recovery in Bulgaria continues to depend on foreign investment, the stability of the financial sector, reforms in public services, the flexibility of export-oriented production, income and household behavior.
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