Bulgarian Households: Liabilities Jumped by 17.7% - Analysis

The obligations of Bulgarian households marked a significant jump during the past year, increasing by 17.7%. This represents the fastest rate of increase since the global financial crisis in 2008, according to the new study.

As a result of this dynamic, the ratio of obligations as a percentage of gross domestic product (GDP) increased by two percentage points, reaching 30%. This is one of the main conclusions of the "Global Wealth Report" (Report on Global Wealth), prepared by Allianz. The report examines in detail the state of assets and debts of households in nearly 60 countries.

Against the background of rising obligations, a growth in the gross financial assets of Bulgarian households was also recorded last year, reaching 6.3%. The value of these assets amounts to 154 billion euros. However, the growth rate showed a slowdown, which is the weakest increase in the last four years.

According to analysts, the reason for the weaker growth of the overall wealth of households is related to the performance of the stock and bond markets. They form the largest asset class, comprising 51% of the household portfolio. Last year, the growth of these assets was only 1%. In contrast, bank deposits and insurance/pensions demonstrate stable performance, reporting increases of 14.5% and 14.2% respectively.

The total amount of new savings in 2024 is worth 8.5 billion euros. The greater part of these savings, as much as 71%, are deposited in bank deposits. The remaining part is mainly invested in insurance and pension products, reaching 2 billion euros.

The enthusiasm of Bulgarians for the stock market, observed especially strongly during the pandemic, is significantly decreasing. Only 0.4 billion euros were invested in securities, mainly in the form of mutual funds.