Development of household savings and debts in small open economies during the global pandemic COVID 19

Abstract

Research background: Global pandemics, like other crises, is reflected in financial decision-making. For many individuals, the crisis represents a loss of confidence in the economy; fears of losing their jobs, and by analogy, subjects assume a deterioration in their own economic situation. In relation to income shocks, consumers exhibit three types of financial behavior: realizing consumption, generating debt or generating savings. The growth of savings with the entrepreneur's investment restraint, increasing the debt burden significantly affects the social sphere and the economic competitiveness of the region in the global space. Purpose of the article: The article deals with a comparison of the development of savings and household debts in Czechia during the economic crisis and the development during the pandemic. At the same time, the analysis includes a comparison of the values f the development of savings and debts with the development of the consumer confidence indicator in the given period. Methods: The main method of the paper is analysis, comparison of data and prediction of the development of quantities. Quarterly and monthly data for the period 2009 - 2013 and 2020 - 2021 were used for the analysis. Basic for analysis and comparison was represented by the ARAD databases, the Czech Statistical Office, etc. Findings & Value added: The results show that the more dynamic growth of savings in the pandemic was caused by limited consumption, but also by wage growth. Debt growth was more pronounced during the economic crisis, during the pandemic it is a reflection of housing needs and developments in the real estate market.