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Financial Crisis: How are Bulgarians Doing?

The global financial crisis has not affected Bulgarian households, according to a recent report which has been issued on the financial situation of Bulgarians during the last quarter of 2008. The survey is by Bulgaria's Industry Watch and comprises data from the Bulgarian National Bank, the National Statistics Institute and the Financial Supervisory Commission, together with information from mutual and volunteer pension funds.

Bulgarians' cash, deposits and bonds in 2008 amounted to some 17 billion euros compared with the previous year, when they amounted to 15 billion. When combining financial assets with housing property, Industry Watch says that the figure reaches nearly 90 billion euros.

Krassen Yotov from Industry Watch says that this demonstrates the "level of confidence households have in the Bulgarian banking system." A point of interest revealed in the survey shows that bank deposits increased by 5% during 2008, despite the onset of the financial crisis across the world. There were factors which contributed to this : the increase of the Deposit Guarantee Fund by BNB to 50,000 euros and high deposit interest rates.

In terms of bank deposits, the survey shows that half of all deposits are in the sum of up to 10,000 euros and that new deposit accounts of 5,000 to 10,000 euros are quickly growing. The second fastest increasing sector is bank deposit accounts of over 25,000 euros.

Bulgarians are avoiding risk investments, such as shares, and during the last year preferred to invest in real estate. Investment by Bulgarians in property during 2008 grew by 12% over the previous year.

The survey backs up the underlying reasons why Bulgarians are not feeling the crisis as other nationalities are:
- high home ownership, with mortgage debt at only 12% of GDP compared with an average of 50% in Europe
- very few or no other loans or debts
- savings and not spending beyond their means