EUROZONE DATA
The Eurozone household savings ratio decreased by 0.4pp to 15.2% according to the Eurostat final sectoral accounts release for Q3 2024. This is a 0.1pp revision from the 0.3pp fall indicated in the flash release, confirming its first decrease since Q2 2022. The household investment rate meanwhile declined further in Q3, by 0.1pp to 9.1% (unrevised from flash).
- Note that in the sectoral accounts, households can either consume, save or invest available resources. The fact that the household savings and investment rates both declined in Q3 indicates consumption as a percentage of income has increased - the question here is to what extent this was due to the higher cost of living (and associated spending on core, necessary items) or higher discretionary spending.
- If the existing accumulation of Eurozone excess savings could be tapped into as a function of higher discretionary spending, that could provide a significant mid-term growth driver for the Eurozone.
- However, the basic cost of living continues to increase (food prices for example continue to drift upwards at a Y/Y rate of 2.4% as of December) after having increased a cumulative 20% since its pre-pandemic level. This could indicate that consumers simply have less remaining after necessary spending than previously, and thus have to decrease their relative savings levels.
- Some of these costs may have been cushioned for a number of households after they built up excess savings during the Covid period (through not going out etc). It might be that now these savings have been depleted by a critical mass of households and therefore the savings rate is starting to fall as these costs are cushioned.
- See further analysis on the topic in our January Macro Signal, here.
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