Euro area saving ratio down again in the end of 2010

In 2010 Q4, the saving ratio for euro area’s consumer is down again. The downward trend has made significant contribution to euro area growth.

Euro area saving ratio down again in the end of 2010
In 2010 Q4, the saving ratio for households in the euro area is down again, at +13.8% of gross disposable income (GDI). This ratio is the lowest recorded since 2008 Q2 and is down from 15.2% in the end of 2009.

The GDI has gained some speed in the end of last year, reaching a growth of 1.1% over the year (-0.2% in 2009). The fall in the saving ratio has provided a significant boost to the euro area consumption (+2.7 % in nominal terms in 2010, +0.8% in real terms) in a context a growing pressure on consumers’ purchasing power.

For the main countries, the saving ratio dropped in Spain (to 13.1% in Q4 from 18% in the end of 2009), Italy (to 12.1% from 13.4%) and France (to 15.6% from 16%). In Germany, the ratio remained stable and higher (17.3%).

Economic Impacts
The rise in inflation in the beginning of 2011 impacts strongly the purchasing power of households in the euro area. In the spring, it is very likely than the real GDI will stagnate. The fall of the saving ratio can provide some support on the short run. However, the post-crisis normalization is now close to an end. Thus, there are very few boosts left.


Tuesday, May 3rd 2011

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