Spain | Saving during the pandemic

Summary

Spain was the Eurozone country that recorded the largest rebound in the household saving rate in the first half of last year. Health restrictions and the fear of contagion were the main factors behind the increase in family savings.

Key points

• Key points:
• The increase in savings in the country occurred in the context of reduced income owing to COVID-19. The decrease in household consumption in 2020 (-12%) offset the decline in household income (-3.3%), leading the average household saving rate to multiply by 2.3 to 14.7% of its disposable income.
• Average savings per household reached EUR 5800 in 2020, up by EUR 3250 from 2019, although the European Commission's confidence survey suggests that the rebound was concentrated among people with higher incomes.
• In a recent publication, we estimated that most of the increase in savings was forced, i.e. due to the inability to consume as a result of the epidemiological situation. The second factor that has contributed to the rebound in household saving is the increase in labor uncertainty.
• The uncertainty as regards what the extra savings from 2020 will be spent on is greater than during previous crises, given both the nature of the growth in savings and its concentration among older population groups and those with higher income levels.
• If all savings accumulated as financial wealth were spent as if they were a temporary advance on income, private consumption could increase by two percentage points more in 2021 than in BBVA Research's baseline scenario (6.1%).

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