BRATISLAVA, February 27, (WEBNOVINY) – Slovak households are among the least indebted within the European Union. The National Bank of Slovakia further writes in the latest issue of the banking journal Biatec that it is only natural given the short history of household loans market, whose dynamic development began as late as around 2003. “Since then, households’ debt has been growing faster than the Slovak economy, as well as households’ income and savings,” the central bank comments.
In spite of fast growth of loans, the volume of retail housing loans compared to the gross domestic product remains one of the lowest in the eurozone. Similarly, the average loan volume per citizen is the lowest within the euro area. The central bank attributes this fact not only to the low penetration of loans, but also to the volume of households’ incomes, which does not allow Slovak households to draw loans in volumes typical for countries with higher average wages.
Housing loans considerably prevail on the Slovak loan market, making up approximately three-quarters of overall extended loans. This is slightly bellow the EU average, but above the average in central and eastern Europe. While in the second half of 1990s home saving banks dominated in loan extension in Slovakia, the new millennium brought development of mortgages by regular bank houses.
Although the overall indebtedness of the retail sector measured as portion of GDP in Slovakia is lower than the EU average, loan costs make up a significant portion of households’ expenses. Considering average interest rates, Slovakia is the “most expensive” country in the eurozone.
SITA
