Almost 6% of Slovaks are threatened by inflation to the point they may not be able to pay their debts, which, according to the European Central Bank, is the third highest number among the EU member states.
Only Cypriots and Italians were more at risk. According to the ECB, the reason is that these people had no financial reserves prepared for the current situation.
The analysis, however, shows that people in Cyprus, Italy and Slovakia have been the most vulnerable even before the inflation. In Slovakia, 4.6% of people were not able to cover their expenditures and pay their debts prior to the current crisis. This number has risen by 1.1% percentage points because of inflation and by 0.1% percentage points caused by higher interest rates.
The real effect of the higher interest rates will come to effect later, according to the ECB, as most people have interest rates fixed for a longer period of time.
“Lower-income households have been disproportionately affected by rising consumer prices and interest rates in 2022,” read the analysis, adding that lower-income households spend more of their income on basic needs like energy and food.
“Since both components have been hit particularly hard by inflation in 2022, lower-income households find themselves in a more vulnerable position,” it added.
(Michal Hudec | EURACTIV.sk)
Source: euractiv.com
