Eastern Europeans save more in the crisis

D.he incomes in the states of Central Eastern Europe are significantly lower than in the west. But that doesn’t mean that the residents there didn’t save during the crisis. On the contrary. The propensity to save has risen, albeit not as strongly as in Germany, where, according to DZ-Bank estimates, people are putting 16 percent of disposable income on the high edge this year. According to the Federal Statistical Office, it was 10.9 percent in each of the previous two years.

Especially the Czechs and Serbs are putting more money aside this year for more provisions in old age and for purchases postponed until after the corona crisis. The monthly average was 9 percent more than in the previous year. This is the result of a study for the Erste Group, the leading bank in Central and Eastern Europe.

Elsewhere, the average savings performance is also increasing, but not as strongly: it was 6 percent in Romania, 3 percent in Hungary, 2 percent in Slovakia and Croatia. In absolute terms and in euros, Slovaks with 113 euros and the Czechs with 109 euros per month are the most diligent savers, while Hungarians and Croatians were able to save the least with 63 euros per month.

High increase in the savings rate

What is striking is the high increase in savings rates in recent years. The Czechs now put 43 percent more kroner back than 5 years ago, in Hungary it is a third more than in 2015. At the lower end is Croatia with a plus of 5 percent. The vast majority of Czechs, Slovaks, Hungarians, Croats, Serbs and Romanians consider regular saving to be “very important” or “rather important”. That’s what 86 percent of the Slovaks and two thirds of the Serbs said, which is the lowest value.

The truth behind the numbers, however, also includes the fact that the proportion of those who say they can save less than before is growing. More people said their financial condition had deteriorated in recent years. In Romania, 38 percent of respondents could not put anything aside. The main reason given was the cost of living, which was rising faster than incomes, but also the falling incomes due to the Corona crisis. Many therefore complain that they cannot save enough. Almost every second person in Hungary says that.

Those who can save shy away from the risk and rely on classic investments such as savings books, building society savings and life insurance. According to the bank’s study, savers in East Central Europe are very risk averse. Correspondingly cautious are their attitudes towards shares, securities, bonds and funds. Only in Romania does the relative proportion of respondents predominate with a positive opinion on stocks and bonds. The population uses “rather simple savings products despite the ultra-low interest rate environment”, analyzes the CEO of Erste Group, Bernd Spalt. The bank must adjust to this and offer customers advice that is tailored to their individual situation and their goals in life.


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