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The cost-of-living crisis’ grip tightens as households deplete savings to combat rising prices.
Recent data from the Cyprus Central Bank reveals that high prices are taking their toll on household deposits, compelling families to dig into their savings to make ends meet and, in many cases, halting any efforts to save money.
The figures disclosed by the Central Bank demonstrate a net reduction of €175.5 million in total deposits for the month of August 2023, compared to a €301.1 million decrease observed in July 2023.
The annual rate of change has dipped to 1.7% for August, down from July’s 2.4% figure. The aggregate sum of deposits for August 2023 reached €51.8 billion. Households, burdened by the mounting costs of living, resorted to drawing from their savings, a trend also witnessed in the preceding month of July.
Over the span of two months, approximately €142 million in savings were used, with €67.5 million and €74.7 million being withdrawn from bank accounts. These funds were predominantly allocated to cover daily expenses, as reported by sources within the banking sector.
Business deposits experienced a modest increase of €2 million in August, a stark contrast to the €5 million surge observed in July. These figures remain notably lower when compared to the robust deposits witnessed in June and May, which amounted to €156.9 million and €224.7 million, respectively.
August saw a notable decrease of €103.7 million in deposits from domestic residents, along with a €22.5 million decline in deposits from European Union citizens and a €49.3 million decrease in deposits from residents of non-EU countries.
Despite the challenging climate, the overall loan market experienced a net increase of €8.5 million in August 2023, marking a positive shift from the €100.3 million decrease recorded in July 2023. The annual rate of change registered at -0.6% in August, compared to -1.0% in the preceding month of July 2023. The total outstanding loans in August 2023 stood at €25.0 billion.
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