Young Czechs are drowning in debt

29. 08. 2024 | Natalie Bezděková

Czechs’ debts are rising and repaying them is becoming increasingly difficult for some. However, this problem affects only a part of the population as the total number of debtors is decreasing. What is alarming, however, is the fact that young people are now having more trouble paying than before.

According to the latest data from the Banking and Non-Banking Customer Information Register, the total debt of Czechs has increased by almost CZK 220 billion year-on-year, a 6.7% increase to a total of CZK 3.4 trillion. Short-term debts, which make up a smaller part of this total debt, rose to CZK 588 billion, up 6.1% on last year. Interestingly, even though the number of debtors is falling, the average amount per debtor has increased to CZK 262.6 thousand.

Regionally, the pace of short-term borrowing increased most in the Karlovy Vary Region, followed by the Pilsen Region. However, the Central Bohemian Region still leads the highest volume of short-term debts with more than CZK 82 billion.

In terms of age groups, people aged 35 to 44 have the highest average consumer debt, while the highest total debt is held by people aged 45 to 54. Although young people have lower debts overall, their repayment problems are alarming. Borrowers aged under 24 have seen their outstanding debt rise by 25% to CZK 1.6 billion, the fastest increase among all age groups.

According to experts, this increase is related not only to the financial illiteracy of young people, but also to the influence of modern trends, such as the influence of influencers on social networks. Younger generations are often borrowing for things they do not need, which can lead to repayment problems and the threat of debt traps.

The growth of long-term debts, especially mortgages, continues, with the average amount per borrower reaching CZK 2.7 million. Although the overall number of people with housing loans is falling, rising house prices are contributing to the increase in average debt. However, payment behaviour is improving in this area, which is a positive signal.

Although the current economic situation is difficult for some households, Czechs are still generally paying their debts relatively responsibly, which can be seen as a positive development even compared to other European countries.

Photo source: www.pexels.com

Author of this article

Natalie Bezděková

I am a student of Master's degree in Political Science. I am interested in marketing, especially copywriting and social media. I also focus on political and social events at home and abroad and technological innovations. My free time is filled with sports, reading and a passion for travel.

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