Growing debts threaten not only public budgets, but also the management of each of us
Every Czech, including infants, currently owes more than 300 thousand crowns. Just in the last five years, the amount of domestic national debt has doubled. Currently, 615 thousand of us are in execution proceedings. The places where the situation is most serious include North Bohemia. For instance, in Bílina, a fifth of the inhabitants face an existential threat.
"Pay the national debt, each 121 thousand, called 15 years ago, when he was still active in domestic politics, Miroslav Kalousek."
"We want to alert voters that the national debt is the debt of every citizen,"
He thundered then at the pre-election press conference, still in TOP09 colors.
Since then, the situation has worsened even more. Every Czech now has a debt exceeding 300 thousand crowns. The reasons are recent high expenditures on repayment of government bonds and government treasury notes.
Trillion-dollar steps are the cause of high public debt
According to the economist of Creditas Bank, Petr Dufek, in the last five years alone, the amount of domestic public debt has doubled as a result of the ongoing deficit budget management.
"Since 2020, the state has been operating with a trillion-dollar deficit, and as evidenced from the budget outlook, it intends to do so in the upcoming years,"
Recently commented on the development of the public debt for the Czech News Agency an analyst. That is why we need to consider ever increasing interest costs in the state budget.
And even though the situation has worsened compared to the times of Miroslav Kalousek, we are not doing so bad compared to a number of other European countries. It may not seem so at first glance. Because we do not have any problem with financing new debt and refinancing old debt.
Personal debt amounts to around 270 thousand crowns
And how are we doing with our personal debts? According to the latest data from the Banking and Non-Banking Client Information Registry, the volume of our debts associated with consumer spending increased by almost a tenth last year. The average amount per client thus increased to more than 270 thousand crowns. The pace of increasing the endangered consumption debt, which speaks about the worse possibility of repayment, accelerated last year. YoY, it increased to 28 billion crowns, that is by 12.3 percent. The good news, on the other hand, is that the number of people with consumer loans decreased YoY by 64 thousand, that is by almost 3 percent.
Real estate price increases are making housing loans more expensive
The volume of debt from housing loans also increased by almost a tenth year on year. This is the highest increase since the record increase in 2021, the data shows.
"The housing loan market significantly picked up last year. The number of people who have a housing loan decreased by one percent. However, the average long-term debt per client increased by 10.5 percent to 2.85 million CZK. Therefore, fewer people have housing loans, but they borrow larger amounts. This corresponds with the increase in real estate prices in recent years,"
Executive Director of the Banking Register Lenka Novotná stated this for the Czech News Agency. The average amount of long-term debt per client was overall a million crowns higher than five years ago.
A relatively common reason for problems with mortgage repayments is divorce. If divorce occurs and property relations are not predetermined, several solutions are available.
"The simplest situation arises if one of the partners has enough of their own resources to pay out the other. If this is not the case, it is possible to consider increasing the existing mortgage or refinancing it,"
explained LP-Life mortgage specialist Jana Vaisová.
Young people are in the line of fire
Who belongs to the most vulnerable groups of the population? The vulnerable are mainly the youngest age groups 15 to 24, where their number has grown by a quarter over the past twelve months. In the case of people aged 30 to 34, the amount of unpaid debt increased by 21 percent to 4.8 billion crowns.
People in the age group of 35 to 44 also have problems with paying short-term debts. The growth of the volume of threatened short-term debt in this category has been accelerating over the last three years. It is also an age group that has the largest volume of housing debt. The combination of not paying off short-term loans and mortgages may represent significant risk for this age category in the future.
The positive trend is an improvement in payment morality among the oldest age category of debtors over 55 years old, where the volume of threatened short-term debt has decreased year-on-year by three percent to 4.8 billion crowns.
The worst situation is in the north
According to the Debt Map of the research agency PAQ Research, at the end of last year, 615 thousand Czechs were in execution. Over three quarters of them had 2 and more immediately. The total amount that the authorities are collecting, according to the same source, is around 567 billion crowns.
The largest proportion of people in executions is from northern Bohemia. For example, in Bílina it is just under 19 percent of the population. In Prague, this proportion is under six, in Brno around seven, and in Ostrava under 11 percent.
Sources: own questioning, ČTK, PAQ Research
