Euro area net saving decreased to €517 billion in four quarters to first quarter of 2021, compared with €528 billion one quarter earlier
Household debt-to-income ratio increased to 96.4% in first quarter of 2021 from 93.6% one year earlier
Non-financial corporations’ debt-to-GDP ratio (consolidated measure) rose to 84.7% in first quarter of 2021 from 77.2% one year earlier
Total euro area economy
Euro area net saving decreased to €517 billion (5.8% of euro area net disposable income) in the four quarters to the first quarter of 2021 compared with €528 billion in the four quarters to the previous quarter. Euro area net non-financial investment declined to €244 billion (2.7% of net disposable income), mainly due to decreased investment by non-financial corporations (see Chart 1).
Euro area net lending to the rest of the world increased to €282 billion (from €242 billion in the previous quarter) reflecting non-financial investment decreasing more than net saving. Net lending of non-financial corporations increased to €234 billion (2.6% of net disposable income) from €134 billion, while that of financial corporations rose slightly to €105 billion (1.2% of net disposable income) from €102 billion. Net lending by households increased to €901 billion (10.0% of net disposable income) from €836 billion. The higher net lending by the total private sector was partly offset by an increase in net borrowing by the government sector (-10.7% of net disposable income, after -9.2% previously).
The annual growth rate of household financial investment increased to 4.9% in the first quarter of 2021, from 4.2% in the previous quarter. Investment in currency and deposits, unlisted shares and other equity, investment fund shares as well as life insurance and pension schemes were main contributors to this acceleration. Investment in listed shares grew at a lower rate, and net disinvestment from debt securities continued at a slightly lower rate.
Households were net buyers of listed shares. By issuing sector, they were net buyers of listed shares of the rest of the world (i.e. shares issued by non-euro area residents), non-financial corporations, other financial institutions as well as insurance corporations and pension funds, and net sellers of listed shares of MFIs. Households continued selling (in net terms) debt securities issued by all resident sectors and the rest of the world (see Table 1 below and Table 2.2. in the Annex).
The household debt-to-income ratio increased to 96.4% in the first quarter of 2021 from 93.6% in the first quarter of 2020, as the outstanding amount of loans to households grew faster than disposable income. The household debt-to-GDP ratio increased, to 62.8% in the first quarter of 2021 from 58.1% in the first quarter of 2020 (see Chart 2), as debt increased and GDP declined.
In the first quarter of 2021, the annual growth of financing of non-financial corporations increased to 2.2%, after 2.0% in the previous quarter. An increase in financing by trade credits, after a decline in the previous quarter, was the main contributor to this development. Financing by equity accelerated, while debt securities financing grew at a lower – albeit still high – rate. Loan financing decelerated as a result of a deceleration in loans from MFIs and a decline in loans from the rest of the world, while intercompany loans and loans from general government and non-MFI financial corporations grew at higher rates (see Table 2 below and Table 3.2 in the Annex).
Non-financial corporations’ debt-to-GDP ratio (consolidated measure) increased to 84.7% in the first quarter of 2021, from 77.2% in the first quarter of 2020; the non-consolidated, wider debt measure rose to 148.7% from 136.8% (see Chart 2). The increases in these ratios were due to a rise in the debt of NFCs and a decline in GDP over this period.
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