Households and non-financial corporations in the euro area: fourth quarter of 2023

9 April 2024

• Households' financial investment increased at broadly unchanged rate of 1.9% in fourth quarter of 2023
• Non-financial corporations' financing increased at broadly unchanged rate of 0.6%
• Non-financial corporations' gross operating surplus increased at annual rate of 1.7%, after 3.6% in previous quarter

Chart 1

Household financing and financial and non-financial investment

(Annual growth rates)

Chart 2

NFC gross-operating surplus, non-financial investment and financing

(annual growth rates)

Households

Household gross disposable income increased in the fourth quarter of 2023 at a lower annual rate of 5.7% (after 6.3% in the third quarter) as the main components grew at lower rates: compensation of employees increased at a rate of 5.9% (after 6.6%), and gross operating surplus and mixed income of the self-employed increased at a rate of 4.4% (after 6.4%). Household consumption expenditure grew at a lower rate of 3.9% (after 5.2%).

The household gross saving rate increased to 14.3% in the fourth quarter of 2023, compared with 14.0% in the previous quarter.

Household gross non-financial investment (which refers mainly to housing) grew at an annual rate of 2.3% in the fourth quarter of 2023, after 1.3% in the previous quarter. Loans to households, the main component of household financing, increased at a lower rate of 0.7% (after 1.0%).

Household financial investment grew at a broadly unchanged rate of 1.9% in the fourth quarter of 2023. Among its components, currency and deposits (0.9% after 0.5%), debt securities (63.4% after 60.1%) and investment in pension schemes (3.0% after 2.5%) grew at higher rates. The acceleration in these investments was mostly offset by lower growth rates of investments in shares and other equity (0.3% after 0.8%) and life insurance (-0.8% after 0.0%).

Household net worth increased at a broadly unchanged rate of 1.2% in the fourth quarter of 2023. While net financial assets grew also due to valuation gains in addition to investments, non-financial assets decreased due to valuation losses exceeding investments. Housing wealth, the main component of non-financial assets, declined (-2.5%) more than in the previous quarter (-1.3%). The household debt-to-income ratio decreased, to 86.9% in the fourth quarter of 2023 from 92.7% in the fourth quarter of 2022.

Non-financial corporations

Net value added by NFCs increased at an annual rate of 5.1% in the fourth quarter of 2023 after 6.5% in the previous quarter. Gross operating surplus grew at a rate of 1.7% after 3.6% in the previous quarter, and net property income (defined in this context as property income receivable minus interest and rent payable) decreased (-8.7%, after 1.9%). As a result gross entrepreneurial income (broadly equivalent to cash flow) increased at a lower rate (0.5%, after 3.4%).^[1]

NFCs’ gross non-financial investment increased at an annual rate of 5.3% (from -11.4%).^[2] NFCs’ financial investment grew at an unchanged rate of 1.4%, compared with the previous quarter. Among its components, loans granted increased at a higher rate of 4.0% (after 2.1%), while investment in shares and other equity grew at an unchanged rate of 1.1%.

Financing of NFCs increased at a broadly unchanged rate of 0.6%. Loan financing grew at a higher rate of 1.2% in the fourth quarter of 2023 (after 0.7%), and the growth rate of financing via the issuance of debt securities by NFCs also increased (2.2%, after 1.9%). Equity financing grew at an unchanged rate of 0.3%. Trade credit financing grew at a rate of 0.7% (after -0.5%), while other liabilities such as other accounts payable excluding trade credits decreased.^[3]

NFCs’ debt-to-GDP ratio (consolidated measure) decreased to 67.6% in the fourth quarter of 2023, from 71.7% in the same quarter of the previous year; the non-consolidated, wider debt measure decreased to 126.0% from 132.9%.

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Notes

• This statistical release incorporates revisions to the data since the first quarter of 2020.
• The annual growth rate of non-financial transactions and of outstanding assets and liabilities (stocks) is calculated as the percentage change between the value for a given quarter and that value recorded four quarters earlier. The annual growth rates used for financial transactions refer to the total value of transactions during the year in relation to the outstanding stock a year before.
• The euro area and national financial accounts data of non-financial corporations and households are available in an interactive dashboard.
• Hyperlinks in the main body of the statistical release are dynamic. The data they lead to may therefore change with subsequent data releases as a result of revisions. Figures shown in annex tables are a snapshot of the data as at the time of the current release.
• The ECB publishes experimental Distributional Wealth Accounts (DWA), which provide additional breakdowns for the household sector. The release of results for 2023Q4 is planned for end-May 2024.