Bulgarians Lose Over Lv 2 Blnin Savings due to Inflation in Past Year - Experts
February 26 (BTA) - Inflation has swallowed close to 2,019,000,000 leva of Bulgarians' savings in a year. The annual savings losses are calculated at 3.63 per cent as of end-December, 2019, based on the official statistics (the inflation rate in January 2020 being 4.2 per cent year-on-year, and average deposit interest rates standing around 0.57 per cent, according to central bank data), commented Victor Maner, co-founder of Impetus Capital, which invests in growing innovative companies.
Bulgarians' deposits between 5,000 leva and 50,000 leva add up to a total of 26.12 billion leva, or an average of 15,000 leva. The holders of such deposits are usually the most active group of investors in growing companies across the world, according to the financial consultants.
Bulgarians invest just 2.4 per cent of their savings in company shares. In Eastern Europe, this figure stands at 20 per cent of savings, according to the Organisation for Economic Co-operation and Development's data for 2018.
In view of the loss-generating deposits, currently there are close to 15,000 companies in Bulgaria whose sales revenues and operating profits have been increasing by over 25 per cent in the last three years. Such companies offer a good investment opportunity which is much more attractive than real estate, Manev explained.
The European Central Bank said last month that it will retain the record-low interest rates, which foreshadows a prolonged period of earning losses for Bulgarian savings account holders. The European Central Bank's base interest rate has stayed under 1 per cent for close to seven year now.