Household savings equate to three straight months of declines, though still 4.7% higher than a year ago
Trend change in the evolution of household savings. The outbreak of the pandemic and the economic crisis caused households to fatten their piggy bank monthly and in a sustainable way. A trend that came to a dead stop in August, with a remarkable drop in the money that the Spaniards kept in the bank at that time.
Far from being a one-off, that turning point in August has extended to the months of September and October, sending a total of €10,417 million out in that short three-month period, according to Bank of Spain statistics. .
The move coincides with the most tense moments due to the price escalation resulting from the inflationary spiral. In fact, the CPI for July – a month before deposit withdrawals began – was the highest in history, at 10.8%. It is therefore clear that the increase in inflation is the cause of this decrease in the savings balance, from 997,433 million euros at the end of July to 987,016 million at the end of October.
Despite this, this figure is still 4.73% higher than the figure recorded a year ago, when families were still afraid to touch the savings accumulated during the pandemic to cover their expenses.
The problem is that all analysts pointed out that this money, tightly “held” in the entities, would gradually unblock itself to promote consumption and investment. But now, in the inflationary environment, families are forced to pull out of those savings to cope with the rise in the cost of living and reorganization of their budget, given the escalation of electricity bills, gas and especially and more recently the price Of food.
The situation repeats itself if only the data of companies are taken into account, whose deposits with financial institutions increased by 4.48% in October compared to the previous year to EUR 309,675 million. However, this figure is 3.33% lower than the level recorded in September, when 320,371 million in deposits were collected. In other words, in just one month, companies have withdrawn 10,696 million bank deposits.
The deposits of all residents of Spain were placed at 1.599 billion euros in the tenth month of the year, which represents an increase of 1.54% in the year and a decrease of 0.95% compared to the previous month.
The amount of deposits held by residents in Spain plus that of those abroad amounted to EUR 1.669 trillion in October, representing an increase of 2.25% compared to the same month a year earlier and a decrease of 1.04% compared to September.
Source: La Verdad
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.
