The first wave of the coronavirus crisis has led to additional household savings
During the first wave of the coronavirus crisis, households increased their savings at the macroeconomic level. Their free savings increased by EUR 12.4 billion in the second quarter of 2020 compared to the same quarter last year. This growth is due to an increase in disposable income of EUR 2.4 billion and a decrease in consumer spending of EUR 10 billion compared to a year earlier. The free savings ratio – the volume of savings relative to gross disposable income – reached 35%, against an average savings ratio of 25% in the same quarter over the past 5 years (16% yearly). The lockdown and containment measures have significantly reduced consumption opportunities, which is a major reason for the decline in consumer spending. In addition, some of the households have saved extra as a precautionary measure against the high uncertainty surrounding the development of the pandemic and the economy.
Almost EUR 11 billion extra in households’ bank accounts
Compared to a year earlier, households deposited almost EUR 11 billion extra in their current and savings accounts in the second quarter of 2020. Some 63% went to savings accounts and the remaining 37% to overnight deposits (current accounts). Households deposited their savings in ordinary savings accounts rather than deposit accounts. Since the interest rate difference between these two types of savings accounts is negligible, deposits with agreed maturity have been on their return for some time.
Figure 1 - Prepayments (volume) by age category*