Real incomes are growing rapidly - NBU
Kyiv • UNN
Nominal and real incomes in Ukraine are growing rapidly due to low inflation, which is having a positive impact on the banking sector, improving consumer demand and lending opportunities, although some uncertainty remains regarding long-term investment and lending.
In Ukraine, nominal household incomes are growing quite rapidly, and even real incomes are growing given low inflation. This was reported by the Director of the NBU Financial Stability Department Pervin Dadashova during the presentation of the Financial Stability Report - June 2024, according to a correspondent of UNN .
Nominal household incomes are growing quite rapidly, and even real incomes are growing rapidly as well, given low inflation. This means a lot of good things for the banking sector. It improves consumer demand, and thus improves demand for consumer loans. Given that incomes remain high and are growing, particularly in the category of bank customers, the loan-to-income ratio is quite low there
According to her, this suggests that there is room to increase banking operations and further lending.
That is, the situation is favorable for the banking business. In addition, the situation is favorable for banks because these incomes are deposited in their accounts. The high growth rate of deposits and current accounts to household income remains quite good. In other words, there are no problems that banks are experiencing in terms of a decline in their interest in keeping their funds in the system, which makes funding stable. That is why we consider the current state of the sector, specifically the state of income, to have a positive impact on the banking sector in general
However, she noted that will be monitored further, and there is some uncertainty about the prospects.
This uncertainty translates into fears of investing in longer assets, fears of taking out market mortgages, so there are factors that are holding back lending. There are also factors that are holding back longer-term deposits, which is the same uncertainty again. But the situation is better now than it was, for example, 6 months ago in terms of risks to the financial system
Addendum
In Ukraine, demand on the housing market is slowly growing, but is still significantly lower than before the full-scale invasion, with more interest in secondary market housing.
