July 28, 2023
- Euro area net saving was broadly unchanged at €633 billion in four quarters to first quarter of 2023
- Household debt-to-income ratio decreased to 91.3% in first quarter of 2023 from 95.5% one year earlier
- Non-financial corporations’ debt-to-GDP ratio (consolidated measure) declined to 70.2% in first quarter of 2023 from 75.3% one year earlier
Total euro area economy
Euro area net saving was broadly unchanged at €633 billion (5.8% of euro area net disposable income) in the four quarters to the first quarter of 2023, as compared with €632 billion in the four-quarter period ending in the fourth quarter of 2022. Euro area net non-financial investment decreased to €609 billion (5.6% of net disposable income), due to decreased investment by non-financial corporations, while net investment by households, financial corporations and general government were broadly stable (see Chart 1).
Euro area net lending to the rest of the world increased to €68 billion (from €47 billion in the previous quarter), reflecting the decreased net non-financial investment and broadly unchanged net saving. Net lending of non-financial corporations increased to €142 billion (1.3% of net disposable income) from €99 billion, while that of financial corporations slightly decreased to €125 billion (1.2% of net disposable income) from €131 billion. Net lending by households stayed unchanged at €307 (2.8% of net disposable income). The growth in net lending by the total private sector was partially offset by an increase in net borrowing by the general government (-4.7% of net disposable income, after -4.6%).
Chart 1
Euro area saving, investment and net lending to the rest of the world
(EUR billions, four-quarter sums)
* Net saving minus net capital transfers to the rest of the world (equals change in net worth due to transactions).
Households
Household financial investment increased at an annual rate of 2.4% in the first quarter of 2023, down from 2.6% in the previous quarter. This deceleration was mainly due to a lower growth rate of currency and deposits, while net purchases of debt securities as well as shares and other equity accelerated.
In the four quarters to the first quarter of 2023, households were net buyers of debt securities issued by all sectors (except other financial institutions[1]), with net purchases increasing particularly strongly for debt securities issued by general government and MFIs. Households were also overall net buyers of listed shares, primarily those issued by non-financial corporations and the rest of the world (i.e. shares issued by non-residents of the euro area), while they sold listed shares issued by MFIs and insurance corporations (see Table 1 below and Table 2.2. in the Annex).
The household debt-to-income ratio[2] decreased to 91.3% in the first quarter of 2023 from 95.5% in the first quarter of 2022. The household debt-to-GDP ratio declined to 56.1% in the first quarter of 2023 from 58.9% in the first quarter of 2022 (see Chart 2).
Table 1
Financial investment and financing of households, main items
(annual growth rates)
| Financial transactions | |||||
| 2022 Q1 | 2022 Q2 | 2022 Q3 | 2022 Q4 | 2023 Q1 | |
| Financial investment* | 3.0 | 2.8 | 2.8 | 2.6 | 2.4 |
| Currency and deposits | 4.2 | 3.8 | 4.1 | 3.8 | 2.3 |
| Debt securities | -5.3 | 1.3 | 9.2 | 21.3 | 45.9 |
| Shares and other equity | 2.9 | 2.4 | 1.8 | 1.1 | 1.6 |
| Life insurance | 1.8 | 1.5 | 1.2 | 0.9 | 0.8 |
| Pension schemes | 2.2 | 2.3 | 2.3 | 2.3 | 2.2 |
| Financing** | 3.7 | 4.7 | 5.1 | 4.4 | 3.8 |
| Loans | 4.2 | 4.4 | 4.2 | 3.7 | 2.9 |
Source: ECB.
* Items not shown include: loans granted, prepayments of insurance premiums and reserves for outstanding claims and other accounts receivable.
** Items not shown include: financial derivatives’ net liabilities, pension schemes and other accounts payable.
Chart 2
Debt ratios of households and non-financial corporations
(percentages of GDP)
Source: ECB and Eurostat. * Outstanding amount of loans, debt securities, trade credits and pension scheme liabilities.
** Outstanding amount of loans and debt securities, excluding debt positions between non-financial corporations.
*** Outstanding amount of loan liabilities.
Non-financial corporations
Financing of non-financial corporations increased at an annual rate of 1.5% in the first quarter of 2023, after 2.0% in the previous quarter. This resulted from a deceleration in financing by loans, in particular from MFIs, other financial institutions and from within the non-financial corporation sector, as well as in financing by shares and other equity, debt securities, and trade credits (see Table 2 below and Table 3.2 in the Annex).
Non-financial corporations’ debt-to-GDP ratio (consolidated measure) declined to 70.2% in the first quarter of 2023, from 75.3% in the first quarter of 2022; the non-consolidated, wider debt measure decreased to 130.9% from 138.3% (see Chart 2).
Table 2
Financing and financial investment of non-financial corporations, main items
(annual growth rates)
| Financial transactions | |||||
| 2022 Q1 | 2022 Q2 | 2022 Q3 | 2022 Q4 | 2023 Q1 | |
| Financing* | 3.2 | 3.2 | 3.0 | 2.0 | 1.5 |
| Debt securities | 5.5 | 4.8 | 3.1 | 1.0 | -0.1 |
| Loans | 4.6 | 5.0 | 5.9 | 4.3 | 3.4 |
| Shares and other equity | 1.3 | 1.5 | 1.2 | 1.0 | 0.8 |
| Trade credits and advances | 11.5 | 10.7 | 7.5 | 3.3 | 2.8 |
| Financial investment** | 5.0 | 4.8 | 4.2 | 2.9 | 2.4 |
| Currency and deposits | 8.3 | 7.6 | 7.0 | 5.1 | 0.7 |
| Debt securities | -1.3 | 4.1 | 10.7 | 13.6 | 24.4 |
| Loans | 6.9 | 6.0 | 5.6 | 4.1 | 3.7 |
| Shares and other equity | 2.2 | 2.6 | 2.3 | 1.7 | 1.2 |
Source: ECB.
* Items not shown include: pension schemes, other accounts payable, financial derivatives’ net liabilities and deposits.
** Items not shown include: other accounts receivable and prepayments of insurance premiums and reserves for outstanding claims.
Source: European Central Bank
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