The stock of financial assets held by Hungarian households rose to an unprecedented level in the first quarter of the year. It reached nearly HUF 102,100 billion (EUR 265 billion) by March, up 15.4 percent from a year earlier, according to data published by the Hungarian National Bank (MNB) on Tuesday. Net financial assets minus liabilities reached HUF 86,888 billion (EUR 225 million) at the end of March, also reflecting a dynamic 17.5 percent increase from a year earlier, reports Világgazdaság.
According to the central bank statistics, the rapid increase in the stock of financial assets is accompanied by a gradual decline in the weight of “idle” – i.e. uninvested – money in household portfolios. For example, the stock of cash held by households grew by only 3.2 percent year-on-year to just over HUF 6,700 billion (EUR 17.3 billion), reducing its weight in the total portfolio from 7.3 percent in the first quarter of 2023 to 6.6 percent in March. The situation was similar for deposits, the largest part of which is uncommitted bank money: in March, deposits amounted to HUF 14,736 billion (EUR 38 billion), 3.6 percent more than a year earlier, and the share of deposits fell by 1.7 percentage points to 14.4 percent in a year.
The bonds – mostly Hungarian government bonds – also increased by more than one fifth over a year to reach HUF 14,150 billion (EUR 37.7 billion),
giving debt securities a share of almost 14 percent of the total household savings. Shares and equities, the largest part of the household portfolio, grew by 21 percent to close to HUF 50,850 billion (EUR 132 billion) in one year, accounting for roughly half of household financial assets. It is noteworthy that the MNB recorded a dramatic increase of more than 44 percent in the holdings of investment fund shares in this category, now exceeding HUF 11,400 billion (EUR 29.5 billion). The weight of investment fund shares in the total portfolio also jumped sharply, increasing by more than 2 percentage points to 11.2 percent in one year. The statistics also show a dynamic annual growth of over 38 percent for listed equities, with holdings slightly above HUF 2,470 billion (EUR 6.4 billion).
This time, the central bank also recorded strong stock growth of over 18 percent in technical reserves, including insurance and fund reserves:
this was mainly due to insurance, but the value of pension fund reserves also rose by more than 12 percent year-on-year to HUF 2,653.5 billion (EUR 6.8 billion).
The increase in the financial assets of households was also driven by inflows of fresh money and revaluation gains. Overall, the balance of transactions – i.e. fresh deposits and withdrawals – showed a plus of more than HUF 1,600 billion (EUR 4 billion) in the first quarter, while small investors gained more than HUF 2,400 billion (EUR 6.2 billion) on exchange rate movements between January and March this year.
