Euro area economic and financial developments by institutional sector: first quarter of 2024

26 July 2024

• Euro area net saving increased to €809 billion in four quarters to first quarter of 2024, compared with €785 billion one quarter earlier
• Household debt-to-income ratio decreased to 85.7% in first quarter of 2024 from 90.9% one year earlier
• Non-financial corporations' debt-to-GDP ratio (consolidated measure) declined to 67.6% in first quarter of 2024 from 70.6% one year earlier

Total euro area economy

Euro area net saving increased to €809 billion (6.9% of euro area net disposable income) in the four quarters to the first quarter of 2024, as compared with €785 billion in the four-quarter period ending in the fourth quarter of 2023. Euro area net non-financial investment decreased to €525 billion (4.5% of net disposable income), mainly due to decreased investment by non-financial corporations (see Chart 1 and table 1 in the Annex).

Euro area net lending to the rest of the world grew to €330 billion (from €268 billion in the previous quarter), reflecting the increased net saving and decreased net non-financial investment. Household net lending increased to €452 billion (3.9% of net disposable income), from €402 billion. Net lending of non-financial corporations grew to €261 billion (2.2% of net disposable income) from €256 billion, and that of financial corporations increased to €132 billion (1.1% of net disposable income) from €125 billion. Net borrowing of government stood unchanged at €515 billion (-4.4% of net disposable income), contributing negatively to euro area net lending.

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 unchanged annual rate of 2.0% in the first quarter of 2024. Investment in currency and deposits grew at a higher rate (1.7% after 0.8% in the previous quarter), while investment in debt securities grew at a lower although still high rate (40.1% after 55.5%).

Household investment in debt securities was supported by net purchases of debt securities issued by general government and MFIs. Households were overall net sellers of listed shares, selling mainly listed shares of non-financial corporations. Households were net buyers of listed shares issued by rest of the world (i.e. shares issued by non-euro area residents), MFIs and other financial institutions (see Table 1 below and Table 2.2. in the Annex).

The household debt-to-income ratio^[1] decreased to 85.7% in the first quarter of 2024 from 90.9% in the first quarter of 2023. The household debt-to-GDP ratio also decreased, to 53.1% in the first quarter of 2024 from 55.6% in the first quarter of 2023 (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 a broadly unchanged annual rate of 0.8%, reflecting broadly unchanged growth of equity (0.2%) and loan (1.1%) financing, as the slower growth in financing in loans granted by MFIs was largely offset by higher growth in loans granted by other financial institutions (see Table 2 below and Table 3.2 in the Annex). Financing by the issuance of debt securities (2.2% after 1.7%) and by trade credits (1.6% after 1.1%) increased at higher rates. Listed shares issued by non-financial corporations were purchased (in net terms) by other non-financial corporations and MFIs, while other sectors were net sellers.

Non-financial corporations' debt-to-GDP ratio (consolidated measure) decreased to 67.6% in the first quarter of 2024, from 70.6% in the first quarter of 2023; the non-consolidated, wider debt measure declined to 127.7% from 131.9% (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 2024.
• Revisions may be higher in this and the following releases as in 2024 EU countries implement a benchmark revision in major macroeconomic statistics. For further information see also: https://ec.europa.eu/eurostat/web/esa-2010/data-revision.
• 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.
• The ECB publishes experimental Distributional Wealth Accounts (DWA) for the household sector. The release of results for 2024 Q1 is planned for 30 August 2024 (tentative date).