Tamas Hak-Kovacs, DSK: Heavy Western sanctions will have an effect on inflation

Every component of inflation is different than before, and we cannot assume that what it is today will be the same tomorrow. For example, one component of inflation is the capacity of the economy, which depends on the people, and the pandemic has had a huge impact on this capacity, because people overestimate the attitude to work and this component is changing. This was stated by the Chairman of the Management Board and Chief Executive Officer of DSK Bank Tomas Hak-Kovac in the show Money.bg on Bulgaria On Air TV.

“In this process, we have a geopolitical situation that is not long-term, but it has an impact. Russia is the largest supplier of gas, the largest exporter of wheat, and Ukraine is in second place, so there are additional complications in an already complicated situation. “he said.

According to him, the mandate of the ECB and the Fed is to fight inflation, but there are doubts about the determination of central banks to fight inflation. In some countries, such as Hungary, there are determined governments that intervene and start setting price caps and setting prices.

New price levels after the war?

“The reaction of the West will be very severe sanctions that will have a long-term effect on the markets. We can imagine sanctions like those of Iran, for example. It will also have an effect on inflation. The big question is what is the reaction to this one-time jump. led to a spiral in prices and not a one-time inflation, “he said.

If we look at the BNB’s expectations, we have very high inflation of 7.5% this year, but next year it will start to return to more normal levels and it will take another year to return to below 2%, which is the goal of the ECB. “From one point of view, this is a positive scenario, but the process may be longer due to ongoing shocks.”

According to the expert, the quality of bank loans does not depend so much on inflation as on the macroeconomic situation and a clear danger that the quality will deteriorate, but it should be noted that it has been at very high levels for a long time. “The banking sector in the world has to deal with this situation.”

According to him, it is wrong to say that the fees of the banks are increasing, because the only ones with a higher growth are the fees related to cash. “Banks have 3-4 products. One is lending – the price falls there and no one complains. The second product is a deposit, where we are obliged to sell at a loss and we have fees.

How long will the growth of housing loans continue?

The housing market is a specific issue and there are concerns from various regulators regarding the so-called balloon. Opinions of bankers and regulators differ.

“There are certain indicators for the bubble, one of which is when the standards for lending are released, but this is not the situation at the moment. The other indicator is the property price-wage ratio and given the current ratio there is nothing unusual in growth. loans continue to fall further “.

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