Bulgaria ranks 35th in the 2023 list of the wealthiest countries, with net financial assets per capita amounting to 16,410 euros. The Global Wealth Report, released by Allianz, highlights a notable increase in global financial assets of private households, which has risen by 7.6%, offsetting a previous decline of 3.5%. The total financial assets worldwide reached 239 trillion euros until the end of the year.
The report indicates a normalization in bank deposits following the surge in savings during the pandemic. The fresh savings total declined by 19.3%, to 3 trillion euros, largely due to a significant drop in bank deposits. Meanwhile, investments in securities surged by 10%, as many savers shifted their focus from stocks to bonds amid a changing interest rate environment.
Interest rate hikes have contributed to a global slowdown in private debt growth, which fell to 4.1%, the weakest increase in nine years. Global private household liabilities stood at 57 trillion euros at the end of 2023. This slowdown in debt growth occurred across various regions, particularly in Western Europe and North America, where debt growth dropped significantly.
Real estate markets faced challenges as rising interest rates led to the slowest growth in a decade, with property values increasing by only 1.8%. Concerns about climate change and its potential effects on property values have also emerged, predicting significant declines in housing prices under various scenarios.
In Bulgaria, household financial assets increased by 5.8% in 2023, a stark contrast to the over 40% growth seen in the prior two years. This moderation was mainly driven by stocks, which only rose by 1.5%. However, bank deposits saw stable growth of 11.2%, while insurance and pension savings increased by 17.5%, although these made up a smaller portion of the household portfolio.
The trend among Bulgarian savers reflected a notable decline in fresh investments in securities, plummeting from 5.4 billion euros to 0.7 billion euros. Despite this, savers increased their bank deposits, doubling their fresh funds to 4.4 billion euros. After withdrawing funds in 2022, they reinvested 2.1 billion euros into insurance and retirement savings in 2023. Overall, new savings in Bulgaria dropped by 21%, to 7.2 billion euros.
In real terms, the situation appears less favorable, with financial assets decreasing by 2.6% when adjusted for inflation. However, compared to pre-pandemic levels, the purchasing power of financial assets has risen by 24.4%. Real estate values continued to show robust growth, increasing by 9.9%, despite the shifts in interest rates.
Notably, liabilities in Bulgaria surged by 13.6%, marking the highest growth since before the global financial crisis, resulting in an increased debt ratio of 28%. Despite this, net financial assets advanced by only 4.1%, leading to Bulgaria’s drop to the 35th place in the ranking of wealthiest countries. (Novinite)