Pre-crisis household consumption behaviour and its heterogeneity according to income, on the basis of micro statistics

Following the crisis, since mid-2009 domestic GDP has been growing slowly, but steadily. In 2011, there may have already been a material increase in real incomes as well, although a slight decline in consumption has been observed recently. In spite of more cautious consumption behaviour with greater emphasis on saving and debt repayment, the ratio of nonperforming loans within banks’ outstanding household loans continued to increase in the aforementioned period. The underlying reason for this phenomenon is that households accumulated considerable debt prior to the crisis. As a result, a protracted balance sheet adjustment process may currently be hindering an increase in consumption. These developments are reflected in the macro statistics as well, but the measure of indebtedness can vary significantly across the different income groups of households. An exploration of this heterogeneity may facilitate a more thorough understanding of consumer behaviour and enable more precise identification of the extent of the indebtedness of different income groups. For this examination, in my analysis I have used the Household Budget Survey compiled by the CSO as a database and reviewed changes in real incomes in the various income deciles prior to the crisis (until 2008), as well as typical consumption patterns and the borrowing behaviour stemming from them. According to the data, prior to the crisis it was mainly the low- and medium-income social strata, in which households adopted a consumption path that departed from actual income while their real income was declining. For the low-income strata, due to the high instalments compared to their income, even a slight strengthening in the exchange rate of the Swiss franc may have resulted in debt repayment problems, whereas in the case of the medium-income strata the increase in the ratio of non-performing loans may have primarily been caused by loss of employment and been exacerbated by the depreciation of the Hungarian forint against the Swiss franc.