Fearful of the debt trap
Although the number of mortgages taken out by Poles continues to grow dramatically, they still constitute less than 40 percent of overall household debt, a survey done by the Gdańsk Institute for Market Economy (IBnGR) shows. By contrast, in Holland and Finland the figure is 90 percent, in Australia 85 percent, and in the US, Great Britain and Germany, 75 percent.
So why are people in Poland so reluctant to take out loans, especially when compared to other EU members?
"It is difficult to give a clear-cut answer to this question", admits IBnGR economist, Marta Penczar. "It might be because of the short tradition of crediting in the country, or a not very fortunate economic situation."
Polish households owe the banks relatively small amounts. Household debt is now less than 20 percent of banks' annual income, which is one tenth of equivalent rates in EU leaders Holland or Denmark. Household debt in all highly developed countries is much higher than in Poland, both in absolute values and as to the relation between annual income and GDP. "In most Western societies, mortgages are around 70 percent of people's debt, so this will be the area of biggest growth in the next few years," said Penczar.
When it comes to consumer credits, Germany and Great Britain are the European leaders - average household consumer debt is EUR 9,300 (zł.38,095) in the former and EUR 5,900 (zł.24,168) in the latter. By comparison, consumer credits in Poland equal EUR 1,341 (zł.5,900).
Even if the growth of consumer loans grows dynamically in the next few years, there is no danger to the financial system in Poland. Moreover, hampering credit expansion through legal regulations could be disadvantageous for the economy, say the authors of the report.
The Gdańsk Institute for Market Economy predicts that total household borrowing, including consumer loans and mortgages, will rise by six percent annually over the next five years, compared with the two to three percent growth seen in Germany, France and Britain. "We will remain a society with no tradition of borrowing, but things are slowly changing," says IBnGR chief, Bohdan Wyżnikiewicz.
So why are people in Poland so reluctant to take out loans, especially when compared to other EU members?
"It is difficult to give a clear-cut answer to this question", admits IBnGR economist, Marta Penczar. "It might be because of the short tradition of crediting in the country, or a not very fortunate economic situation."
Polish households owe the banks relatively small amounts. Household debt is now less than 20 percent of banks' annual income, which is one tenth of equivalent rates in EU leaders Holland or Denmark. Household debt in all highly developed countries is much higher than in Poland, both in absolute values and as to the relation between annual income and GDP. "In most Western societies, mortgages are around 70 percent of people's debt, so this will be the area of biggest growth in the next few years," said Penczar.
When it comes to consumer credits, Germany and Great Britain are the European leaders - average household consumer debt is EUR 9,300 (zł.38,095) in the former and EUR 5,900 (zł.24,168) in the latter. By comparison, consumer credits in Poland equal EUR 1,341 (zł.5,900).
Even if the growth of consumer loans grows dynamically in the next few years, there is no danger to the financial system in Poland. Moreover, hampering credit expansion through legal regulations could be disadvantageous for the economy, say the authors of the report.
The Gdańsk Institute for Market Economy predicts that total household borrowing, including consumer loans and mortgages, will rise by six percent annually over the next five years, compared with the two to three percent growth seen in Germany, France and Britain. "We will remain a society with no tradition of borrowing, but things are slowly changing," says IBnGR chief, Bohdan Wyżnikiewicz.
