– The state of foreign savings and investments of Hungarian citizens at the end of September is exactly three times higher than at the end of 2020 – the portal Portfolio.hu calculated in the analysis ‘Do Hungarians transfer their money abroad?’.
The same source starts from the fact that even before 2020, richer Hungarians invested and saved abroad, but that in the last five years members of the middle class of the local society have increasingly been doing the same. Such a conclusion, the portal adds, follows from the structure of the foreign financial assets of Hungarians as presented by the Central Bank. Namely, the foreign financial assets of Hungarian citizens are dominated by deposits and savings in banks outside Hungary, which together amount to 12.7 billion euros or 65 percent of the complete foreign financial assets of Hungarians.
Stocks, on the other hand, as a form of property that Hungarians hold abroad, make up 13 percent of their total assets outside the country.
– The share of foreign savings observed by the Central Bank within the respective asset categories increased from 12.4 percent to 12.8 percent only in the first three quarters of this year. When looking at indirect state assets, the foreign share in Hungary’s total financial assets is already close to 17 percent – warns Portfolio.hu, pointing to the contribution of new forms of financial assets such as Revolut accounts opened as part of cross-border activities of companies and individuals and ETFs purchased from providers of investment services for trading on foreign stock exchanges, to the growth of foreign assets of Hungarians.
Fear of depreciation
The portal notes that deposits abroad can be placed for investment in Hungary, as a form of protection or investment guarantee.
– A significant wave of foreign savings was also recorded at the beginning of this year, which we attributed to the payments of government bonds at the time. Our January survey of more than 10,000 people also showed that respondents plan to invest interest in foreign currency financial instruments in roughly the same proportion, around 26 to 27 percent, as in government bonds. This did not necessarily mean foreign accounts or investments, but also included domestic savings in foreign currency – comments Portfolio.hu…
The Central Bank of Hungary, in reviewing the growth of foreign assets of Hungarian citizens, starts from the assessment that from 2022, the fear of the depreciation of the forint and easily available foreign investment assets with technological development resulted in an increase in the demand for foreign assets. The same source notes that the growth of foreign financial assets of Hungarians slowed down last year and in the first nine months of this year, and the Central Bank cites Switzerland, Austria and Slovakia as the most important “export” markets for Hungarian private financial capital. For the governor of the Hungarian Central Bank, Mihály Varga, the most important trend is the increase in the financial assets of Hungarians, which in the middle of the current year reached the amount of 303 billion euros or 73,362 euros per household, reports Jutarnji list.
– The net financial wealth of domestic households, seen through the share in the country’s GDP, increased from 82 percent in the early 2010s to 114 percent today – warned Varga.
Proportion of the rich
Part of the Hungarian media, referring to the growth of the financial assets of Hungarians, points to research according to which one-quarter of citizens cannot set aside money for savings at all due to low incomes, and that three-quarters of Hungarians estimate that they will not be able to provide a pension amount sufficient for a normal life. The same sources estimate that, for example, the average amount of new savings of 2,500 euros per household in Hungary in the first six months of this year is not realistic.
– The average family did not save that much, because there are huge differences between the financial situations of individual households. The rich upper class, on the other hand, managed to save many times the amount, while those with low incomes saved only a fraction of that amount or accumulated debt – comments the portal Mfor.hu. The same source points to the trend of decreasing circulation of euros and other foreign currencies in Hungary’s payment system as another trend that contributes to the increase of foreign assets of Hungarians.
– Savers who think in foreign currency prefer to keep money in a bank account or in securities, instead of hoarding foreign banknotes, as was the case before – Mfor.hu assesses…
Part of the media analysis in Hungary of the phenomenon of the outflow of private capital from Hungary notes how the aforementioned outflow occurs despite the fact that opening a foreign bank account is not always a simple process. Due to the law on the prevention of money laundering, the Hungarian media remind, many banks abroad require that those who want to open an account with them have local residence and employment. In other words, according to the same sources, if a client just walks into a bank off the street with a bag of euros, dollars or Swiss francs, he may not be able to deposit them into his bank account.
(Vijesti.ba)
