Euro area economic and financial developments by institutional sector: first quarter of 2023

27 July 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)

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).

Chart 2

Debt ratios of households and non-financial corporations

(percentages of GDP)

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).

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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 4 July 2023.
• This statistical release incorporates revisions to the data since the first quarter of 2013, reflecting, amongst others, the inclusion of Croatia in the euro area aggregates for this period.
• The euro area and national financial accounts data of non-financial corporations and households are available in an interactive dashboard.
• 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.