Sunday, 31 October 2021

World Savings Day: Growth of Savings in Croatia Continues in 2021

ZAGREB, 31 Oct, 2021 - Increased uncertainty about future economic trends is leading to an increase in savings, according to an analysis by the Croatian Chamber of Commerce (HGK) on the occasion of World Savings Day, marked on 31 October.

Data from the Croatian National Bank (HNB) show household deposits at the end of September 2021 were HRK 240.3 billion, up HRK 20 billion or 9.1% from September 2020 and up HRK 1.6 billion or 0.7% from August 2021.

Citing HNB data from August, they underscored that a year-on-year growth of deposits was recorded in all counties.

In terms of the distribution of household deposits by banks, the concentration of deposits is the highest in the City of Zagreb, whose citizens had HRK 67.2 billion in savings at the end of August, a share of 29% percent.

Broken down by counties, per capita deposits exceed HRK 50,000 in the Adriatic Croatia counties, with the exception of Lika-Senj County, while the City of Zagreb and Zagreb County are the only continental counties to register such per capita deposits.

Istria County tops the list with per capita deposits of HRK 85,249, followed by the City of Zagreb (HRK 83,049), while Vukovar-Srijem County (HRK 26,068) ranks last. At the level of Croatia, per capita deposits amount to HRK 57,555, up from last year's HRK 53,103, the HGK analysis showed.

The share of time deposits is 33.6%, down 4.7 percentage points compared to the end of last year, while the share of savings deposits has reached 35%, up 2.2 percentage points, and the share of deposit money has reached 31.4%, up 2.5 percentage points.

Huge oscillations in savings

Josip Zaher of the HGK said in a statement carried by the press release that the increase in savings of Croatian citizens was not surprising given that in every crisis, this time caused by the COVID-19 pandemic, people always saved more.

As long as uncertainty regarding future economic trends is heightened, the same will apply to savings, said Vedran Šošić of the HNB, underscoring that oscillations in saving were huge.

Thus, amid the outbreak of the pandemic and the consequent lack of goods, and especially services, as well as caution and fear due to a potential loss of income, savings doubled overnight.

The reopening of the economy and the recovery of confidence enabled a gradual return to pre-pandemic patterns of spending and savings, although savings are generally still slightly higher than usual, said Šošić.

He also said that the majority of money surpluses accumulated after the outbreak, citizens deposited in banks. Also, savings were directed to the repayment of consumer debt, and investment in residential real estate is always popular, so housing loans grew increasingly fast, with increasingly obvious signs of overvaluation.

Member of the Management Board of the pensions funds management company Raiffeisen, Eva Horvat, stressed that nearly 400,000 Croatian citizens were saving in one of the voluntary pension funds, which contained assets of HRK 7.3 billion.

Savings growth constant in Croatia

On the occasion of World Savings Day, Zagrebačka Banka (Zaba) also released an analysis, in which Hrvoje Dolenec said that savings growth was constant in Croatia, and the reasons for that were the growth of GDP, living standards and disposable income.

"In the past two and a half years, the movement of financial assets of the Croatian population indicates an acceleration of that growth. This was especially evident during the pandemic, when the acceleration of savings was partly forced, due to limited movement and travel and less available services, such as restaurants, cafes, recreational activities, and partly voluntary, out of precaution and concern for the future," said Dolenec, noting that deposits and cash together accounted for nearly half of the total financial assets of households.

Igor Pavlović of Zaba underscored that low interest rates were certainly among the most important reasons for the reduction in the habit of opting for time deposits.

(€1 = HRK 7.509157)

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Friday, 30 October 2020

Croats Increase Savings by HRK 11 Bn in Past Year

ZAGREB, October 30, 2020 - Over the past year, Croatian citizens increased their savings by HRK 11 billion despite the pandemic and a weaker tourism season, with saving deposits across Croatia totalling HRK 52,784 per capita, the Chamber of Commerce (HGK) said on Friday ahead of World Savings Day.

Citing central bank data, the HGK said household deposits reached HRK 214.9 billion in August, up 5.4% on the year.

Across Croatia, deposits per capita amount to HRK 52,874, above last year's average of HRK 48,626, ranging from HRK 23,443 in Vukovar-Srijem County to HRK 78,681 in Istria County.

People on the coast, and partly in Zagreb, save based on tourism, which is why this year's disappointing season has changed some trends. 

Year on year, deposits increased in every county bar Osijek-Baranja, but those in continental Croatia increased by 7.5% and those along the coast by 2.5%. This, the HGK said, shows that the weaker tourist season resulted in weaker deposits in the coastal counties.

Interestingly, deposits along the coast increased less than in 2019, whereas in continental Croatia the growth rate was above the national average, the opposite of last year.

Central bank economist Vedran Sosic said there were no household saving estimates in Croatia, i.e. estimates of the part of one's income that is not spent, so they are based on trends in the value of financial assets and bank deposits as their biggest component.

(€1 = HRK 7.5)

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