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Q1 Sectoral Accounts Suggest Solid Real Income Gains

EUROZONE DATA

The Q1 Eurozone sectoral accounts suggest solid real income gains last quarter. As consumption growth lagged behind income growth, there was a resulting increase in the savings rate. Also, the accounts show savings continuing to outpace investment - suggesting a deterioration of the EZ capital account.

  • Household real consumption per capita increased by 0.2% Q/Q (vs +0.1% Q4). Real disposable income per capita meanwhile increased 1.5% Q/Q (vs +0.7% Q4).
  • This led the household savings rate to increase by 1.4 percentage points compared to Q4, to 15.4%, continuing its upward trend..
  • The household investment rate meanwhile decreased by 0.1pp, to 9.5%, also in line with recent trends - indicating a deterioration of the EZ capital account.
  • Looking at the individual countries, the theme that savings outpaced investment (which started around mid-2022) was quite broad-based. A notable exception was Greece, where a 2.0pp decline in the savings rate amid gross fixed capital formation jumping 13.5% indicate large foreign-financed investments in Q1.

MNI, Eurostat

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The Q1 Eurozone sectoral accounts suggest solid real income gains last quarter. As consumption growth lagged behind income growth, there was a resulting increase in the savings rate. Also, the accounts show savings continuing to outpace investment - suggesting a deterioration of the EZ capital account.

  • Household real consumption per capita increased by 0.2% Q/Q (vs +0.1% Q4). Real disposable income per capita meanwhile increased 1.5% Q/Q (vs +0.7% Q4).
  • This led the household savings rate to increase by 1.4 percentage points compared to Q4, to 15.4%, continuing its upward trend..
  • The household investment rate meanwhile decreased by 0.1pp, to 9.5%, also in line with recent trends - indicating a deterioration of the EZ capital account.
  • Looking at the individual countries, the theme that savings outpaced investment (which started around mid-2022) was quite broad-based. A notable exception was Greece, where a 2.0pp decline in the savings rate amid gross fixed capital formation jumping 13.5% indicate large foreign-financed investments in Q1.

MNI, Eurostat