What can we learn from Eurosystem Household Finance and Consumption Survey data? – An application to household debt in Slovakia

This study delivers a stock-taking exercise of household debt in Slovakia. About 27% of all Slovak households hold at least some debt. The rate of homeownership in Slovakia is close to 90% and the highest in the euro area, while the share of indebted households is lowest. The reason for this peculiarity lies in the country’s history. Less than 10% of households are mortgage debt holders, and about 20% hold nonmortgage debt. About 15% of total debt holdings are covered by liquid financial assets and about 50% by households’ total assets excluding the main residence. When accounting only for the debt of vulnerable households, the share of total debt not covered by households’ total assets excluding the main residence lies between about 4% and 15% – depending on the definition used for debt burden measures. In Slovakia, mostly households with relatively young household heads are indebted. Regression analyses show that while self-employed persons and persons with higher education are more likely to hold debt, especially the self-employed are less likely to be vulnerable.