Else Beekman
Spanish households have reached unprecedented levels of wealth in the first quarter of 2024, driven by an increase in assets and a reduction in debt, according to the Bank of Spain.
The total net worth of Spanish households surged by nearly 10% compared to the previous year, hitting a record high of over €2.1 trillion. This significant increase is attributed to higher financial assets and lower debts. In the first three months of 2024 alone, net worth rose by 2.73%.
Increase in financial assets
Financial assets, including cash, stocks, and deposits, grew by 6.68% to €2.88 trillion, representing 194.8% of Spain’s GDP. Cash and deposits constituted the largest portion at 37%, followed by stocks (30%), investment funds (16%), and insurance and pension funds (13%). Notably, the share of investment funds increased, while cash and deposits saw a slight decline.
Decline in debt
Households and businesses in Spain have reduced their debt levels. The total debt of households and companies fell by 1.1% year-on-year in the first quarter, reaching €1.63 trillion. This brought the debt-to-GDP ratio down from 119.3% to 110.1%. Household debt decreased from €695.8 billion to €681.5 billion, reducing the debt ratio from 50.4% to 46%.
This reduction is primarily due to higher repayments compared to new borrowing by both households and businesses.
Economic impact
The robust financial position of Spanish households reflects improved economic stability and confidence. The increased net worth and decreased debt levels are likely to bolster consumer spending and investment, further supporting economic growth.
Also read: Spanish household savings are 42% more than before pandemic