Return to increased deposits from households was recorded this March, evidently because some privileged Cypriot households are returning to saving after continuous outflows in January and February, as well as several others noted in 2023, mainly due to high costs and the pressure it exerted on family incomes.
Yesterday’s announcement of data by the Central Bank, however, not accompanied by any analysis, shows that households set aside €12 million, an amount smaller than the €76.7 million households saved in March 2023.
Nevertheless, the third month of the year presents a better picture compared to outflows of €13.6 million in February and outflows of €37.8 million in January. What is particularly important is whether the trend of increasing deposits from households will continue in the coming months or if it will prove to be something circumstantial.
Previously, the Central Bank had stated, with reference to 2023, that deposits were supported by the continuous growth of the Cypriot economy and the improvement in employment, followed by a partial de-escalation. In moderating the rise in deposits, according to the Central Bank’s estimate, possibly contributed then (autumn ’23) the high consumer spending of households due to summer vacations, combined with significant price increases, which had negative effects on households’ disposable income.
Regarding this year’s March, it’s not only households (partially) that saved, but also businesses. Central Bank data show that business deposits increased by €136.7 million, compared to outflows of €67 million in February ’24 and an increase in deposits of €14 million in March ’23. As for the overall picture, the Central Bank reports that total deposits in March 2024 recorded a net increase of €252.1 million, compared to a net increase of €63.2 million in February 2024.
The annual rate of change in total deposits reached 0.6%, compared to 0.3% in February 2024. The balance of total deposits in March 2024 reached €52.2 billion.
Deposits by residents of Cyprus increased by €318.5 million. Another significant point is that every month, since April 2022 (two months after Russia’s invasion of Ukraine), deposits of residents of third countries, including Russian deposits, have significantly decreased. In March, there were outflows of €61.9 million compared to €2.2 million in February and €6.5 million in March.
