Savings offer growth potential for the economy

One way to support innovative companies could be to channel household savings to the capital markets, MNB Vice Chairman Barnabás Virág said at the BÉT50 conference of the Budapest Stock Exchange in Budapest on Tuesday.

These savings have so far largely been channelled into government bonds. In the current economic environment, the previous rules of thumb do not work; traditional economic stimulus measures would tend to fuel inflation. The solution is to invest in intelligent capital, which is currently underfunded, instead of subsidising traditional sectors, emphasised Virág.

At 110%, the share of private households’ net financial assets in GDP is 24 percentage points above the regional average and amounts to around 200 billion euros. Excluding company shares, this results in 140-150 billion euros in mobilisable financial assets. At 6% of GDP, the net savings ratio of private households is also twice as high as the EU average.