Test 1 - Key points
Published on Wednesday, September 15, 2021
Test 1 - Key points
Summary
Spain was the Eurozone country that recorded the largest rebound in the household saving rate in the first half of last year. Health restrictions and the fear of contagion were the main factors behind the increase in family savings.
Key points
- Key points:
- The increase in savings in the country occurred in the context of reduced income owing to COVID-19. The decrease in household consumption in 2020 (-12%) offset the decline in household income (-3.3%), leading the average household saving rate to multiply by 2.3 to 14.7% of its disposable income. The deceleration was broad-based, led by all main subsectors (durable & non-durable goods: -7.2% & -1.2%, capital: -11.6% and intermediate: -3.5%) except for energy goods production(+2.7% mom). The increase in savings in the country occurred in the context of reduced income owing to COVID-19. The decrease in household consumption in 2020 (-12%) offset the decline in household income (-3.3%), leading the average household saving rate to multiply by 2.3 to 14.7% of its disposable income. The deceleration was broad-based, led by all main subsectors (durable & non-durable goods: -7.2% & -1.2%, capital: -11.6% and intermediate: -3.5%) except for energy goods production(+2.7% mom).
- Average savings per household reached EUR 5800 in 2020, up by EUR 3250 from 2019, although the European Commission's confidence survey suggests that the rebound was concentrated among people with higher incomes. Most of the sectors subtracted from the overall growth, where other transport equipment, rubber & plastic, motor vehicles, electrical equipment and textile production were the pioneers in negative contribution.
- In a recent publication, we estimated that most of the increase in savings was forced, i.e. due to the inability to consume as a result of the epidemiological situation. The second factor that has contributed to the rebound in household saving is the increase in labor uncertainty. The increase in savings in the country occurred in the context of reduced income owing to COVID-19. The decrease in household consumption in 2020 (-12%) offset the decline in household income (-3.3%), leading the average household saving rate to multiply by 2.3 to 14.7% of its disposable income. The deceleration was broad-based, led by all main subsectors (durable & non-durable goods: -7.2% & -1.2%, capital: -11.6% and intermediate: -3.5%) except for energy goods production(+2.7% mom).
- The uncertainty as regards what the extra savings from 2020 will be spent on is greater than during previous crises, given both the nature of the growth in savings and its concentration among older population groups and those with higher income levels. The increase in savings in the country occurred in the context of reduced income owing to COVID-19. The decrease in household consumption in 2020 (-12%) offset the decline in household income (-3.3%), leading the average household saving rate to multiply by 2.3 to 14.7% of its disposable income. The deceleration was broad-based, led by all main subsectors (durable & non-durable goods: -7.2% & -1.2%, capital: -11.6% and intermediate:
- If all savings accumulated as financial wealth were spent as if they were a temporary advance on income, private consumption could increase by two percentage points more in 2021 than in BBVA Research's baseline scenario (6.1%). Industrial Production (IP) grew remarkably lower than expectations by 8.7% yoy in calendar adjusted terms (cons:15.2%) in July, whereas it contracted by 2.3% yoy in raw series. However given the strong momentum so far and still recovering global growth we maintain our 2021 GDP growth forecast at 9%. We expect 2021 GDP growth to be 9%, with risks still on the upside; though today’s data might partially eliminate those risks, which will be clearer with August data. The increase in savings in the country occurred in the context of reduced income owing to COVID-19. The decrease in household consumption in 2020 (-12%) offset the decline in household income (-3.3%), leading the average household saving rate to multiply by 2.3 to 14.7% of its disposable income. The deceleration was broad-based, led by all main subsectors (durable & non-durable goods: -7.2% & -1.2%, capital: -11.6% and intermedia.
Geographies
- Geography Tags
- Spain
Topics
- Topic Tags
- Employment
- Regional Analysis Spain
Tags
- Tags
- savings
- Macroeconomics
Authors
David Ortega
Documents and files
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