TODAY’S – Savings down in Q3 amid unemployment, poor economic performance

Savings down in Q3 amid unemployment, poor economic performanceSavings over the gross domestic product (GDP) declined in the third quarter to 12.4 percent among the urban population, negating the increases in the first two quarters, a survey by ING Bank has shown, blaming rising unemployment rates and falling disposable incomes.

According to ING Bankand#39s andldquoTurkeyand#39s Saving Tendencies Surveyandrdquo third quarter data, savings receded sharply after reaching the highest-ever recorded level of 15.3 percent during the first two quarters of the year ING has been releasing this report since October 2011.

A statement by ING Bank underlined the effect of slowing economic performance and the ensuing growth in unemployment rates. andldquoAlthough the moderate financial conditions due to the loose monetary policies of the central bank seem to have created growth in some durable goods like automotive and home appliances, the optimistic outlook in the economy is negatively affected by unemployment and decelerating economic growth.

Individualsand#39 incomes are not sufficient for any savings,andrdquo the statement said.According to the survey, the main motivation for saving for most people is andldquoinvesting for the futureandrdquo and to financially assist their children when they grow up.

The biggest reason for not being able to save, the survey found, is inadequate salaries which barely cover basic expenditures. For the majority of families, their monthly wages are barely enough for their basic needs.

About 62 percent of survey respondents said they do not make enough money to save for the future. This marks an increase of 10 percentage points compared to the previous month.

Another reason for the failure to set some money aside is debts. Fourteen percent of respondents said they have debts to clear before they are able to save.

The third reason cited by survey respondents is rents.At 25.

7 percent, the rate of those planning to start saving in the months ahead has also fallen to the lowest levels since ING Bank kicked off this survey three years ago.In terms of the preferences of investment instruments, lira-deposit accounts saw a 2 percentage point increase in the third quarter compared to the second, rising to 22 percent.

Gold was still one of the safest havens for households, with 26 percent of all savings in the form of the precious metal. The Individual Pension System (BES) also saw an increase from 13 percent in the previous quarter to 16 percent in the last quarterThe survey of 800 randomly selected individuals in 26 cities is carried out by IPSOS KMG and supervised by SabancI University.

SOURCE: Today’s Zaman

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