Euro area economic and financial developments by institutional sector: first quarter of 2022

27 July 2022

• Euro area net saving decreased to €809 billion in four quarters up to first quarter of 2022, compared with €824 billion in 2021.
• Household debt-to-income ratio declined to 96.2% in first quarter of 2022 from 96.5% one year earlier
• Non-financial corporations' debt-to-GDP ratio (consolidated measure) decreased to 78.8% in first quarter of 2022 from 82.5% one year earlier

Total euro area economy

Euro area net saving decreased to €809 billion (8.0% of euro area net disposable income) in the four quarters to the first quarter of 2022 as compared with €824 billion in the four quarters to the previous quarter. Euro area net non-financial investment increased to €577 billion (5.7% of net disposable income), due to increased investment by households and non-financial corporations, while net investment by financial corporations and by government were broadly stable (see Chart 1).

Euro area net lending to the rest of the world decreased to €260 billion (from €342 billion in the previous quarter) reflecting the decreased net saving and increased net non-financial investment. Net lending by households declined to €440 billion (4.4% of net disposable income, after 5.9% previously). Net lending of non-financial corporations declined to €237 billion (2.4% of net disposable income, after 3.0%) and that of financial corporations decreased to €73 billion (0.7% of net disposable income, after 0.9%). The decrease in net lending by the total private sector more than offset a decrease in net borrowing by the government sector (-4.9% of net disposable income, after -6.3% previously).

Chart 1. Euro area saving, investment and net lending to the rest of the world

(EUR billions, four-quarter sums)

Data for euro area saving, investment and net lending to the rest of the world (Chart 1)

Households

Household financial investment increased at an annual rate of 3.1% in the first quarter of 2022, down from 3.5% in the previous quarter. This deceleration was mainly due to lower growth rates of investment in currency and deposits (4.2%, after 5.0%), shares and other equity (2.9% after 3.9%), and life insurance and pension schemes (2.0% after 2.2%) (see Table 1 below).

Households were overall net buyers of listed shares. By issuing sector, they were net buyers of listed shares of non-financial-corporations, insurance corporations and the rest of the world (i.e. shares issued by non-residents of the euro area), while shares of MFIs and other financial institutions were sold, in net terms. Households continued to sell debt securities (in net terms) issued by MFIs, other financial institutions, government and the rest of the world, while debt securities issued by insurance corporations were bought on a net basis (see Table 2.2. in the Annex).

The household debt-to-income ratio^[1] decreased to 96.2% in the first quarter of 2022 from 96.5% in the first quarter of 2021. The household debt-to-GDP ratio decreased to 59.3% in the first quarter of 2022 from 62.5% in the first quarter of 2021 (see Chart 2).

Data for financial investment and financing of households (Table 1)

Chart 2. Debt ratios of households and non-financial corporations

(debt as a percentage of GDP)

Data for debt ratios of households and non-financial corporations (Chart 2)

Non-financial corporations

The financing of non-financial corporations increased at a higher annual growth rate of 3.2% in the first quarter of 2022, after 3.0% in the previous quarter, following an acceleration in financing by trade credits, loans and debt securities (see Table 2 below). The acceleration of loan financing was due to loans from the rest of the world and from non-MFI financial corporations increasing at higher rates, which more than offset a deceleration of financing via loans from MFIs, intercompany loans and loans from government (see Table 3.2 in the Annex).

Non-financial corporations' debt-to-GDP ratio (consolidated measure) decreased to 78.8% in the first quarter of 2022, from 82.5% in the first quarter of 2021; the non-consolidated, wider debt measure decreased to 142.7% from 147.1% (see Chart 2).

Data for financial investment and financing of non-financial corporations (Table 2)

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Notes

• These data come from a second release of quarterly euro area sector accounts from the European Central Bank (ECB) and Eurostat, the statistical office of the European Union. This release incorporates revisions and completed data for all sectors compared with the first quarterly release on "Euro area households and non-financial corporations" of 5 July 2022.
• The debt-to-GDP (or debt-to-income) ratios are calculated as the outstanding amount of debt in the reference quarter divided by the sum of GDP (or income) in the four quarters to the reference quarter. The ratio of non-financial transactions (e.g. savings) as a percentage of income or GDP is calculated as sum of the four quarters to the reference quarter for both numerator and denominator.
• 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.
• Hyperlinks in the main body of the statistical release lead to data that may change with subsequent 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.