Why will residents' savings increase in 2022?
Can the high growth of deposits support the recovery of consumption and real estate?
The high growth of residents' deposits has aroused widespread concern in the market.
A few days ago, the financial data for 2022 released by the central bank showed that RMB deposits in 2022 increased by 26.26 trillion yuan, a year-on-year increase of 6.59 trillion yuan.
Among them, household deposits increased by 17.84 trillion yuan, while household deposits in 2021 increased by 9.9 trillion yuan.
The large-scale growth of new savings in the household sector has also aroused heated discussions in the market.
Some people believe that if 1/3 of the increase in residents' deposits in 2022 is used to resume purchases of housing and decoration, the Chinese economy will recover smoothly.
Why will residents' savings increase in 2022?
Does the resident sector really have "excess savings"?
Can the high growth of deposits support the recovery of consumption and real estate?
Increased willingness to save for precautionary measures
In 2022, the new savings of the resident sector will have a large-scale growth, which has aroused market attention.
On January 10, the 2022 Financial Statistics Report released by the People's Bank of China showed that RMB deposits for the year increased by 26.26 trillion yuan, an increase of 6.59 trillion yuan year-on-year, of which household deposits increased by 17.84 trillion yuan.
It is worth noting that, from the perspective of household sector savings, household deposits will increase by 9.9 trillion yuan in 2021.
In this regard, many analysts believe that this growth reflects that residents have a strong willingness to save and a low willingness to consume against the background of increased income uncertainty, suppressed consumer demand, and large fluctuations in the wealth management market.
Mingming, the chief economist of CITIC Securities, told China Business News that due to the impact of the epidemic, residents’ consumption scenes are missing, and some consumption has shifted to savings. At the same time, uncertainty about the future will also increase the willingness to save for precautionary purposes.
Analyzing the main reasons for the high increase in residents' deposits, Wang Jian, chief financial analyst at Guosen Securities, also believes that under the impact of the epidemic, the growth rate of residents' income has declined, and the uncertainty of the future has increased, residents' confidence has continued to decline, and their willingness to save for precautionary purposes has increased. The core factor for the high growth of residents' deposits.
In this context, residents' propensity to consume (per capita consumption expenditure/per capita disposable income) has dropped significantly, and their willingness to save for precautionary purposes has increased.
In fact, it can also be seen from the previous survey report released by the central bank that the willingness of residents to save has continued to increase significantly, while the willingness to invest and consume has declined.
According to the central bank's "Questionnaire Report on Urban Depositors in the Third Quarter of 2022", the willingness to save continues to be strong, and residents who tend to "consume more" account for 22.8%, a decrease of 1.0 percentage points from the previous quarter; residents who tend to "save more" Residents accounted for 58.1%, a decrease of 0.3 percentage points from the previous quarter; residents who tended to "invest more" accounted for 19.1%, an increase of 1.2 percentage points from the previous quarter.
In addition to the increased willingness to save for precautionary purposes, the high increase in residents' deposits is also related to the increase in residents' passive savings.
The impact of the epidemic on the consumption scene, the sluggish real estate market and other factors directly led to a decline in the growth rate of residents' consumption expenditure.
Residents' appetite for risk has declined
"I didn't grab a large deposit certificate today. It was too fast, so I released 10 million in less than a second. I will try again next Tuesday." Ms. Peng, who lives in Chaoyang District, received a WeChat message from the bank's account manager.
According to Ms. Peng, when I consulted about wealth management products at the bank a week ago, I learned that the bank has a large certificate of deposit product with a 3-year 3.25% interest rate, but it needs to meet the condition that the funds are new, and the account manager will help to make an appointment to purchase.
Large-denomination certificates of deposit products have large amounts, long terms, and higher interest rates than ordinary deposit products. Under the current situation of uncertain deposit interest rates and income from wealth management products, large-denomination certificates of deposit have won the favor of many depositors.
"Now that the wealth management market is like this, large certificates of deposit are being snatched up, but even if I have new funds, I still haven't snatched them up." Ms. Peng said regretfully.
This also reflects another reason for the high increase in deposits: the yield of wealth management products has fallen sharply, and the capital market has performed poorly.
"In 2022, the volatility of the bond market and stock market will intensify, and the problem of 'breaking the net' will also appear after the transformation of net wealth management. Residents' risk appetite will decrease, and their demands for 'asset preservation' will increase. Deposits are capital-guaranteed investment channels, and demand has expanded. In addition, under the background of deposit rate reform, it is expected that deposit interest will continue to decline in the future, so investors tend to buy deposit products as early as possible to lock in income." Ming Ming said.
Wang Jian believes that the risk appetite of residents has dropped significantly, and the security of money-based and wealth management is relatively high. Therefore, the scale of wealth management and money-based funds has not declined, but the allocation ratio has decreased, resulting in a passive increase in residents' deposits.
Li Chao, chief economist of Zheshang Securities, believes that the impact of the epidemic on residents' savings can be divided into two categories. One is the passive savings caused by the prevention and control of the epidemic or the emergence of high infection rates, and the inability to consume; the other is the impact on the economy. The trend and income expectations are pessimistic, as well as precautionary savings caused by industrial restructuring (education, Internet, real estate, etc.).
Where will residents' deposits move in 2023?
The phenomenon of high growth of resident deposits has also sparked heated discussions in the market. The market is concerned about whether the high growth of deposits can support the recovery of consumption and real estate.
For example, there is a view that if one-third of the increase in residents' deposits in 2022 is used to resume purchases of housing and decoration, the Chinese economy will recover smoothly.
But many analysts do not agree with this view.
Mingming said, "From the perspective of deposit growth rate, there will indeed be a certain phenomenon of 'excess savings' in 2022. We believe that the purchase of houses by some residents with purchasing power can indeed drive economic development and income growth to a certain extent. Factors such as income differences among groups need to be considered, and cannot be generalized. In addition, the promotion of economic recovery does not only rely on real estate sales and other links, but also needs to pay attention to household consumption, enterprise production and investment, etc. Other industries and other departments also need to work together to improve. "
Wang Jian pointed out that since 2006, the year-on-year increase in new resident deposits in a single quarter has exceeded 1 trillion yuan for two consecutive quarters. There are three rounds: from the second quarter of 2008 to the first quarter of 2009, and from the third quarter of 2018 to the second quarter of 2019 , From the first quarter to the third quarter of 2022 (still continuing), the accumulated new resident deposits are 5.69 trillion yuan, 9.76 trillion yuan and 13.21 trillion yuan respectively.
The above three rounds of large increases in resident deposits all corresponded to a sharp drop in the economy. The first two rounds of large increases in deposits lasted for four quarters, after which consumption and real estate showed a recovery trend.
Mingming believes that the high growth of deposits has indeed provided financial reserve support for subsequent consumption and the recovery of real estate, but the recovery of consumption and real estate needs other guarantees, such as further improving residents' income expectations and reducing the willingness to save precautionary savings; The real estate market also needs to deal with industry risks in an orderly manner, support rigid and improved housing needs, consolidate the responsibilities of all parties, ensure the delivery of buildings, and stabilize people's livelihood.
Li Chao predicts that in 2023, residents’ deposits will be diverted to the real sector and the capital market, and part of the “passive savings” will be gradually released as the epidemic situation improves, mainly reflected in the recovery of residents’ consumption and house purchase activities; "Savings" mainly come from the pessimistic expectations of residents and the transformation of industrial structure. Therefore, when the excess savings of residents cannot enter the consumption and real estate fields in large quantities, the capital market will be the core spillover direction.