Macroeconomic Factors Affecting Household Indebtedness

Abstract :

The financial sector is considered stable when it performs its core functions even with negative phenomena in the external and domestic financial environment. The aim of the article will be to describe the state of the economy of the state, which contributes to the greater indebtedness of the population, which may ultimately pose a risk that will appear on the domestic market. The indebtedness of the Slovak population and businesses in relation to GDP has been growing almost continuously since 2012 and exceeds the average of Central and Eastern European countries. The development of the credit market is the result of low interest rates and stable economic growth. The Slovak Republic records the highest year-on-year growth in loans to the entire European Union. In 2018, the volume of loans almost doubled. Also, income growth and increasing credit availability have fueled debt. Continuing pressure on low interest rates and indebtedness of NBS principles has taken many measures to adjust the limits for credit scandals. These changes in lending conditions should mitigate the risk of excessive debt growth. The aim of this article is to bring readers closer to these financial market restrictions.