Rising Debt Among Young Czechs: A Growing Concern

The level of indebtedness among Czech citizens has shown an alarming increase recently, with the debt volume rising by 3.5% to reach 3.26 trillion koruna in this year’s third quarter. The volume of debt at risk due to non-payment has seen a similar hike, with a 3.1% increase to 28.8 billion koruna. These figures were reported by CRIF, a company that operates both banking and non-banking credit registers.

The debt volume for housing loans stood at 2.69 trillion koruna at the end of September, showing a year-on-year increase of 2.8%. Consumer debt volume has increased significantly, with a 6.9% increase to 565.5 billion koruna.

The trend seen among the youngest age group, those aged 15 to 24, is of particular concern. The average unpaid portion of consumer debt has seen the highest increase among this group, rising by a quarter over the year. Jiří Rajl, the executive director of the Non-banking Client Information Registry, noted this.

The average consumer loan stands at 243 thousand koruna, with the average due amount being 141 thousand koruna, 8% more than the previous year.

Debt problems have increased in all regions, most notably in Central Bohemia (by 8.5%) and the Ústí region (8.1%). Over five percent of the total volume of consumer debt, the highest of all areas, is not adequately repaid in the Moravian-Silesian and Ústí regions.

While the volume of long-term debt continues to grow, it is doing so significantly slower than last year. Lenka Novotná, the executive director of the Banking Registry, highlighted that the current increase is due to higher property prices and more expensive mortgages rather than the number of people taking out housing loans.