According to an investigation by the ECB, the savings of households in the euro area accumulated in the corona pandemic are unlikely to give consumption a big boost.

"Overall, the probability of an immediate return of the accumulated surplus savings for future consumption purposes remains limited," wrote experts in a study published on Monday by the European Central Bank (ECB).

No signal for such a surge in the coming year can be derived from survey indicators.

Christian Siedenbiedel

Editor in business.

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In their study, the authors mentioned, among other things, a survey by the EU Commission, according to which households assumed that their spending on larger purchases such as furniture or electrical appliances in the next twelve months will be comparable to those of the beginning of 2020.

The purchase plans for a car for the next twelve months were even below pre-virus levels. 

This is also relevant because the ECB has to keep an eye on how strongly the recovery of the economy after the pandemic will be linked to inflation. 

Record savings rate in Germany

According to the ECB investigation, households in the euro area have saved significantly more since the first half of 2020. Since then, the savings rates have been at a higher level than before the pandemic. A large part of the additional money was accumulated in the form of bank deposits - borrowing was also lower. The authors referred, among other things, to the many corona restrictions in the countries, which meant that restaurant visits, concerts and travel were no longer possible.

According to the ECB study, older people and households with higher incomes in particular have built up additional savings.

Losses in labor income due to the pandemic did not play a major role in either group.

In addition, they consumed more services that were hit by social restrictions.

Their available funds are also less limited.

The authors therefore conclude: "The extent to which these additional savings are converted into consumption can be expected to be relatively low."

2.8 trillion euros in current accounts

On average, Germans saved more of their income in the first three months of this year than ever before - at least since these figures were collected in this way.

This is evident from the data recently submitted by the Federal Statistical Office.

Accordingly, the household saving rate rose to 23.2 percent in the first quarter.

That even exceeded the 20.5 percent from the second quarter of last year from the first lockdown.

In the further course of 2020, the savings rate then fell before it now skyrocketed again.

A large part of the additional savings in Germany is stored in overnight money and current accounts.

The Bundesbank recently put the amounts there at EUR 2.8 trillion.

Studies have shown that involuntary saving due to the corona restrictions was the most important reason for the increased savings rate in the pandemic, not so much the precautionary saving. In addition, older people and people with higher incomes in particular save a lot in Corona times. It is expected that after the pandemic, parts of this savings will be spent again and stimulate the economy. To what extent this will happen, however, is controversial among economists. "With the loosening of the lockdown, the combination of solid income growth and a lower savings rate will give consumption a real boost," said Deka economist Andreas Scheuerle. "However, part of it could be carried abroad as a result of holiday-related travel."