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Financial expert warns of falling savings in Mallorca - inflation and rising costs threaten reserves.
According to a report by www.mallorcazeitung.es, life on Mallorca and the neighboring islands will become significantly more expensive in 2023. This meant that bank customers' savings were below those of the previous year for the first time since the pandemic. Many people had to tap into their reserves to meet the increased costs of basic food, rent or mortgages. Antoni Riera, a professor of applied economics, warns that this trend could intensify in the next few quarters. According to the latest data from the Spanish Central Bank, the value of bank deposits of families and companies on the islands amounted to 33.925 billion in the third quarter of the year...
Financial expert warns of falling savings in Mallorca - inflation and rising costs threaten reserves.
According to a report by www.mallorcazeitung.es, life on Mallorca and the neighboring islands will become significantly more expensive in 2023. This meant that bank customers' savings were below those of the previous year for the first time since the pandemic. Many people had to tap into their reserves to meet the increased costs of basic food, rent or mortgages. Antoni Riera, a professor of applied economics, warns that this trend could intensify in the next few quarters.
According to the latest data from the Spanish Central Bank, the value of bank deposits held by families and companies on the islands amounted to 33.925 billion euros in the third quarter of the year, 1.8 percent lower than in the same period last year. In the summer of 2022, however, Balearic citizens and companies had 34.577 billion euros in their accounts. The debts for loans or mortgages are not yet included here and amounted to 32.193 billion euros in the third quarter of 2023, which is 4.9 percent below the total from summer 2022.
This development shows that the pandemic savings created during the lockdown are gradually being used up. Inflation is expected to remain high and above the 2 percent target. Interest rates are also likely to remain high, but at least no further increases are expected. There is even speculation that the European Central Bank could cut the key interest rate slightly in the first quarter of 2024.
This development could have significant effects on the financial market and the financial industry. Increased inflation and decline in savings could lead to a shift in investment behavior. In addition, a potential cut in key interest rates could influence lending and consumer spending. Financial institutions may need to adapt their strategies to adapt to the changing situation and provide attractive offers to their customers.
Read the source article at www.mallorcazeitung.es