- Euro area net saving increased to €818 billion in four quarters to fourth quarter of 2021, compared with €796 billion one quarter earlier
- Household debt-to-income ratio increased to 96.8% in fourth quarter of 2021 from 96.3% one year earlier
- Non-financial corporations’ debt-to-GDP ratio (consolidated measure) decreased to 80.0% in fourth quarter of 2021 from 81.8% one year earlier
Total euro area economy
Euro area net saving increased to €818 billion (8.3% of euro area net disposable income) in 2021 compared with €796 billion in the four quarters to the third quarter of 2021. Euro area net non-financial investment increased to €515 billion (5.2% of net disposable income), due to increased investment by non-financial corporations, households and government (see Chart 1).
Euro area net lending to the rest of the world decreased to €332 billion (from €379 billion previously) reflecting the increased net non-financial investment which exceeded the growth of net saving. Net lending by households decreased to €577 billion (5.9% of net disposable income) as compared with €691 billion previously. Net lending of non-financial corporations declined to €286 billion (2.9% of net disposable income) from €311 billion, and that of financial corporations decreased to €94 billion (1.0% of net disposable income) from €112 billion. The decrease in net lending by the total private sector was partially offset by net borrowing by the government sector, declining to -€626 billion (-6.4% of net disposable income) from -€736 billion.
Data for Euro area saving, investment and net lending to the rest of the world (Chart 1)
Financial transactions can be presented with a counterpart sector breakdown for deposits, loans, debt securities, listed shares and investment fund shares (see Table 1). In 2021 the largest transactions among these financial instruments were interbank operations of other MFIs[1] with the Eurosystem (€852 billion), mostly in the form of deposits, and net purchases of euro area government debt securities by the Eurosystem (€805 billion). Financial investment of households remained high as compared with previous years, particularly with respect to transactions vis-à-vis other MFIs (€375 billion), mostly in the form of deposits, as well as net purchases of investment fund shares (€228 billion). In parallel, the financing received by households from other MFIs in the form of loans amounted to €262 billion. The largest financial transactions vis-à-vis the rest of the world involved euro area investment funds, both regarding financial investment in instruments issued by the rest of the world (€501 billion) as well as financing received from the rest of the world (€481 billion).
Households
The annual growth rate of household financial investment decreased to 3.4% in the fourth quarter of 2021, from 4.0% in the previous quarter. Investment in currency and deposits was the main contributor to this deceleration, while investment in shares and other equity grew at a higher rate, in particular for investment fund shares.
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 sector (i.e. shares issued by non-residents), while they sold (in net terms) shares issued by MFIs. Households continued to sell debt securities issued by MFIs, other financial institutions, general government and the rest of the world, which was only partly offset by purchases of debt securities issued by insurance corporations (see Table 2 below and Table 2.2. in the Annex).
Data for financial investment and financing of households (Table 2)
Chart 2 below shows the stock of selected financial assets held by households (in dark blue) vis-à-vis counterpart sectors, at the end of 2021.[2] Households’ financial assets were mostly liabilities of financial intermediaries such as MFIs (38% of households’ allocated financial assets), insurance corporations (26%), investment funds (13%) and pension funds (12%). Holdings of financial assets vis-à-vis non-financial corporations (6%), government (1%) and the rest of the world (2%), mainly in the form of listed shares and debt securities, represented much lower proportions of households’ financial assets.
* Financial instruments for which the counterpart sector breakdown is available: deposits, loans, debt securities, listed shares and investment fund shares/units. In addition, in this chart the counterpart sector breakdown for insurance, pension and standardised guarantee schemes (F.6) is estimated. (See methodological note: Extension of the who-to-whom presentation to insurance and pension assets).
The household debt-to-income ratio[3] increased to 96.8% in the fourth quarter of 2021 from 96.3% in the fourth quarter of 2020. The household debt-to-GDP ratio decreased, to 60.1% in the fourth quarter of 2021 from 62.1% in the fourth quarter of 2020 (see Chart 3).
Data for debt ratios of households and non-financial corporations (Chart 3)
Non-financial corporations
In the fourth quarter of 2021 the annual growth of financing of non-financial corporations increased to 3.2%, after 2.5% in the previous quarter, following an acceleration in financing by trade credits, loans from financial corporations and the rest of the world, as well as debt securities. This was only partially offset by a deceleration in intercompany and government loans (see Table 3 below and Table 3.2 in the Annex). Financing via the issuance of shares and other equity grew at a broadly unchanged rate.
Data for financial investment and financing of non-financial corporations (Table 3)
Non-financial corporations’ debt-to-GDP ratio (consolidated measure) decreased to 80.0% in the fourth quarter of 2021, from 81.8% in the fourth quarter of 2020; the non-consolidated, wider debt measure declined to 144.5% from 145.4% (see Chart 2).
Chart 4 below shows the main components of the non-financial corporations’ debt (in dark blue) vis-à-vis counterpart sectors. At the end of 2021, the non-financial corporations’ debt in the form of loans and debt securities was held primarily by MFIs (36%), other non-financial corporations (28%), the rest of the world (15%) and other financial institutions (10%).
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