Eurozone household savings highest since 2021, but investments fall

HOUSEHOLD savings in the eurozone rose to their highest level in about three years while investments continued to fall in the first quarter of 2024, the European Union’s statistics office said on Thursday (Jul 4).

Europeans have long saved more than their US counterparts and the gap has widened recently, possibly due to uncertainties stemming from the war in Ukraine and the wider economic outlook.

The household saving rate, which measures savings as a proportion of disposable income, rose to 15.3 per cent in the euro area during the first quarter, up from 14.1 per cent in the fourth quarter of 2023, data from Eurostat showed. That was still below the pandemic-era high of 25.1 per cent seen in the second quarter of 2020.

From Italy selling government bonds to households, to French talk of a pan-European savings product, governments across Europe are seeking ways to mobilise household wealth.

But while savings grew, household investments fell to 9.5 per cent in the quarter, their lowest level since early 2021, the data showed.

Eurozone inflation eased to 2.5 per cent in June, while consumer confidence also improved. REUTERS