• Analysis The middle class, the big loser: 59% of the population lost purchasing power until 2021 and it got worse in 2022

Spanish families saved 7.6% of their disposable income last year, which shows that despite the impact of inflation on households' pockets, some were able to preserve part of their income for the future, although overall it was much lower than the European Union average, which stood at 12.7%. according to data published on Wednesday by Eurostat.

There were two countries in which families were not only unable to save, but spent more than they earned and, therefore, had to draw on savings accumulated in previous years or take out bank loans to finance their expenses. This was the case of Greece (whose savings fell by 4.03%) and Poland (-0.77%).

In addition to these two states, there are seven others in which families saved less than in Spain - Estonia, Latvia, Lithuania, Slovakia, Croatia, Portugal and Cyprus - while in others such as Germany or the Netherlands, savings were much higher (19.9% and 19.4%, respectively).

The savings ratio is linked to how high or low disposable income is in absolute terms compared to living standards – in the case of Spain wages rose last year below inflation and income tax remained unchanged downward – and is also related to the character of the population. since the evidence shows that while countries in the south tend to prefer leisure to saving, in others in central and northern Europe they are more cautious.

The fact that European households have been able to save in 2022 is positive in a scenario of such high inflation. In Spain, for example, prices rose by an average of 8.4% for the year as a whole compared to 2021, so it is good news that families have been able to save despite the increase in their expenses.

It should be borne in mind, however, that these savings are not distributed evenly among all families, something that the Bank of Spain and the European Central Bank have warned about on many occasions; So the savings of 2022 could also have been concentrated in the hands of a few, while other families will not have been able to save at all and others will have even had to finance their expenses from credit.

The level of savings of Spaniards in 2022 was much lower than in 2021, when inflation rose by an average of 3% (five points less than last year) and they managed to preserve 13.8% of their income. In 2020, administrative restrictions to fight the pandemic made consumption difficult (due to home confinements, capacity limitations and fear during the recovery), which is why Spaniards saved 17.5%, a record for the series.

In 2022, with the definitive end of the pandemic, spending was prioritised, which was also much more expensive than usual, hence savings fell to 7.6%, a figure also lower than that of 2019, of 8.2%, but in line with the average recorded in the years prior to the pandemic.

Poorer families

One of the reasons that influences a family's ability to save is their income: whether or not their income has risen above inflation. In the case of Spain, real gross disposable income – what a household earns after deducting taxes and social contributions and filtering out the impact of rising prices – fell by 2022.2% in 78, which means that families were poorer.

Despite this drop in income, they were able to save in aggregate terms, although they did so less than the previous year.

The fall in the disposable income of Spanish families was the fifth steepest in the EU, behind only Estonians (-5.9%), Lithuanians (-5.4%), Czechs (-4.7%) and Latvians (-3.1%). In these four countries, average inflation last year was much higher than in Spain: in Slovakia it was 19.8%, in Lithuania it was 18.9%, in the Czech Republic it was 14.8% and in Latvia it was 17.2%, which justifies the impoverishment of their households. Despite the fact that inflation in Spain was lower (8.4%), given that incomes rose very little – mainly wages – the loss of disposable income was very high.

In the EU as a whole, the average loss of income was 0.76%, much lower than in Spain, because there were nine countries in which household incomes increased despite inflation. Notable among them are Croatia, with an increase of 3.9%, Greece (+1.6%) and Hungary (+1.3%).

Household disposable income in Spain fell again last year, just as it did in 2020, when it sank by 1.4%, and despite the fact that it had recovered last year. If we analyse its evolution prior to the pandemic, the income of Spanish families has not fallen since the years following the financial crisis. At the beginning of the century until 2009 it was growing, but from 2010 to 2013 it fell year after year, and since 2014 it had returned to positive territory.

"If we look at developments in the EU over the past two decades, after negative rates between 2010 and 2013 due to the global financial and economic crisis, the real adjusted gross disposable income of households per capita increased from 2014 to 2021. In 2020, during the initial year following the COVID-19 crisis, the pace of change slowed but remained positive. After a record growth of 2.8% in 2021, the highest in the last two decades, in 2022 the increase in nominal value (+6.3%) was lower than the increase in prices (+7.2%), so there was a decrease in the real value observed," Eurostat reports.

  • Inflation