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Dec 10, 2009 15:37 EEST
SOFIA (Bulgaria), December 10 (SeeNews) – The financial wealth in Bulgaria increased in the third quarter by some 2.0% from the previous quarter, reaching 34.3 billion levs ($25.85 million /17.54 million euro), Sofia-based consultants Industry Watch said.
On an annual basis, the growth of financial wealth in Bulgaria slowed to 2% in the third quarter, remaining positive despite the increasing influence of the economic crisis, Industry Watch said in a report released on Wednesday. The financial wealth represents the financial assets people own less their real estate property and debt.
The net financial wealth, which comprises the financial wealth and the indebtedness of the population, increased by 3.5% on the year in the third quarter, partly due to the slowdown of bank lending, Industry Watch said without providing a figure.
“The growth potential of personal wealth is constrained by the stagnation on the labour market, visible through declining incomes and increasing unemployment, which will probably continue to pick up in 2010 as well.”
Still, there exist stimulating factors for the growth of wealth, such as the substantial decline in the prices of some consumer goods and most investment assets (housing, shares), which motivates households to postpone purchases of durable goods. Additionally, annual interest rates on one-year time deposits in the local lev currency reached 8.0% in the third quarter, Industry Watch said.
“Bulgarians continue to avoid high-risk investments (such as stocks and mutual fund shares) at the expense of investments in low-risk assets (such as deposits and currency), which constitute almost 90% of the financial wealth of the population”, the report said.
Personal savings factor is important as it provides a buffer against potential deepening of the crisis in the real sector in 2010.
”Relieving is the fact that household indebtedness is still almost twice lower than the level of debt in Euro area member countries”, Industry Watch said.
The value of the urban housing, owned by households, decreased by 5.4% for a quarter, reaching 105 billion levs in September. Thus, the total household wealth (financial and housing) contracted to 139 billion levs in the third quarter of 2009.
(1 euro = 1.95583 levs)
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