Spanish households are saving almost €12 out of every €100 they earn. It is a precautionary measure in the face of economic uncertainty, with interest rates increasing and mortgages rising.
Specifically, Spanish households saved 11.7% of their gross disposable income between April and June. This is according to data from the National Institute of Statistics (INE).
Taking into account seasonal and calendar effects, it is the highest savings rate if we exclude the figures from 2020 and 2021, when the pandemic occurred, and 2012, the year of Spain’s financial rescue, from the series. Before the pandemic, the savings rate was around 8%.
And although it is only a minimal increase of 0.2 points compared to the previous quarter, it confirms the upward trend observed since the end of last year. Spaniards not only save through savings accounts, but also choose other forms. For example, treasury bills, mutual funds, shares or deposits, whose profitability has increased due to the constant rise in interest rates.
Confidence in economy
Before the health crisis, families kept barely 8% of their disposable income on savings. In 2018, this figure actually fell to an all-time low, to €5 for every €100 earned. And as now, this figure was closely linked to confidence in the national economy and home purchases. One of the causes of all this, according to experts, is economic instability. As Roberto Gómez-Calvet, professor of economics at the European University of Valencia, explains, “economic uncertainty keeps us from thinking about new purchases and investments, and the opposite is saving”.
Wage increase outweighs inflation
In most cases, the improvement in wages is not enough for families to stop the loss of purchasing power. Between January and June, prices rose 4% year-on-year, according to the INE. Still, it helps close the gap and makes it easier to save some more money. In any case, this increase may not continue until the second half of the year, as this is when the extra pay is paid out.
The problem is that the wage increase did not increase household consumption, but was eaten up by inflation. That is because real consumption is still 1% lower than in 2019. Families went to restaurants less and bought less at the supermarket. Yet they spent more because prices went up.