Households saving less now that pandemic restrictions are lifting

European households are saving less now that the Covid-19 pandemic restrictions are lifting.

The household saving rate in the euro area was at 19 per cent in the second quarter of 2021, compared with 21.5 per cent in the first quarter of 2021. It is still the third highest value since the beginning of the time series in 1999 (the highest was 25.2 per cent in the second quarter of 2020, according to Eurostat.

At the same time, the household investment rate in the euro area increased from 9.2 per cent to 9.4 per cent in the second quarter of 2021, the highest value since 2011.

The decrease of households’ saving rate in the euro area is explained by consumption increasing by 4.4 per cent, while households’ gross disposable income increased at a lower rate of 1.3 per cent.

The business investment rate in the euro area decreased to 23.6 per cent, compared with 23.9 per cent in the first quarter of 2021. The peaks of the investment rate of non-financial corporations observed in 2015Q2, 2017Q2, 2019Q2, 2019Q4 and 2020Q1 are related to large imports of intellectual property products reflecting globalisation effects.

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