Households in Eurozone are saving more

On the radar

• In Croatia, trade deficit reached EUR 1357 million.

• In Romania trade balance landed at EUR -2.88 billion and 2Q24 final GDP was revised up (to 0.3% q/q and 0.9% y/y).

• In Hungary, inflation rate eased to 3.0% y/y in August.

• In Czechia, August’s inflation increased to 2.6% y/y (from 2.0% y/y), slightly more than expected.

• In Slovakia, industrial production grew by 0.9% y/y in August.

• Slovenia will release industrial output growth at 10.30 AM CET.

• At 11 AM CET Croatia published producer prices.

• Finally at noon CET Serbia will announce interest rate.

Economic developments

The gross saving rate of households has been gradually increasing in the Eurozone. If we exclude the pandemic period (when the saving rate surged), the gross saving rate is the highest in the decade. Prior to the pandemic, the average saving rate was around 12%, while in 2Q24, it was reported to reach 15.6% in the Eurozone. Although we do not see the breakdown for CEE countries, we would expect a quite similar trend. The Economic Indicator Sentiment survey data point out that the willingness to save over the next 12 months is as high as it was during the pandemic, suggesting that households are using recent increases in disposable income not only for consumption but also for saving purposes. Such behavior of households may postpone the dynamics of the recovery.

Market developments

The Hungarian forint and the Polish zloty continued to strengthen against the euro as EURHUF moved toward 398, and EURPLN dropped below 4.30. Long-term yields have shown mixed development this week. Czechia held a successful bond auction on Wednesday, selling 2027 and 2025 government papers amid strong demand (bid-to-cover ratio was at 4.55 and 2.11, respectively). Locally, the key event is Serbia's central bank meeting. We expect the central bank to continue its monetary easing and deliver another 25 basis point rate cut, bringing the key rate to 5.5%.

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