Bulgarian households’ wealth in cash, bank deposits and equity was 26.3 billion leva at the end of the second quarter of 2007, up by one third compared to the same period of the previous year, a report by the independent analytical company Industry Watch said, as quoted by Dnevnik daily on October 29.

The report said that for the first time, in June 2007, the wealth of households in Bulgaria was more than half of the country’s gross domestic product. The economic growth, combined with the stock market development and favourable tax reforms should secure stable income from personal savings in the next years, said Industry Watch.

In the period April-June 2007, bank deposits increased their popularity as a savings product among Bulgarian households. According to Bulgarian National Bank data, household deposits were close to 17 billion leva by the end of August this year with over half of their balance denominated in a foreign currency.

The 2007 inflation increase, especially in August, stamped out deposit returns, providing an additional incentive for banks to raise interest rates on deposits over the past couple of months. In response to competitive offerings from the mutual funds, the local lenders have also created risk-weighted deposit products. The ongoing improvement in deposit terms and conditions would continue in 2008.

The domestic cash holdings were unchanged at 6.8 billion leva at end-August.

Equities posted the biggest gain in terms of a share in household wealth portfolios, up 150 per cent year-on-year by end-September. Industry Watch estimated that Bulgarian households had invested more than 1.67 billion leva in company stock.