Finns still confident in personal economic outlook

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A recent study by Tapiola Bank Ltd. indicates that Finnish consumers continue to believe that their personal finances will develop favourably. According to the survey, only six per cent of Finns believed that their employment situation would grow weaker in the next few years, while more than one-third predicted that the employment situation would improve.
      The majority of respondents felt that their spending power had remained the same over the past 12 months, while particularly those living in the Greater Helsinki Area and in the province of Oulu believed that their buying power had improved.
     
The bank reports that the Finns' confidence in the economic outlook for their own households is reflected in the borrowing of money from the bank. People with lower and lower earnings are borrowing large amounts of money, even though interest rates are climbing.
      "This is not a sound situation, as normally some 30 to 40 per cent of a family's net income should be enough to cover the debt servicing costs", notes Service Manager Marja Pajulahti from Tapiola Bank.
     
Alarmingly, the Finns' knowledge of their own outgoings and for example the interest payable on their deposits appears to be very poor.
      When questioned, more than one in six of all respondents were not able to quantify the monthly amount of money spent for hobbies in their households. Furthermore, more than half of the respondents did not know the rate of interest payable on deposit accounts.
      According to the survey, the average spending on hobbies and the like was EUR 110 per month. The respondents also estimated that the deposit account interest rates would be 0.9 per cent on average, while the real interest rates are around 0.1 to 0.2 per cent, suggesting a substantial information gap on what exactly they were getting for leaving their money in a normal bank account.


Links:
  Tapiola Group

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