2023/Q2 Article 08. The accrual and use of the excess savings built up by Spanish households since the onset of the pandemic

Series: Economic Bulletin.

Author: Pana Alves and Carmen Martínez-Carrascal.

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2023/Q2 Article 08. The accrual and use of the excess savings built up by Spanish households since the onset of the pandemic (732 KB)

Summary

Rationale

Households overall built up a large stock of excess savings during the pandemic. The use of these excess savings and the potential amount currently available for spending are relevant to understanding how they may support consumption over the coming quarters.

Takeaways

• To end-2022, households had barely used the excess savings accumulated during the pandemic for purchases of consumer goods and services. The bulk of these funds have been channelled towards financial investments, specifically deposits and investment funds.
• A more modest proportion of these savings – albeit one that has been increasing since 2021 – has been used to purchase non-financial assets (in particular, property) and to repay home loans.
• A large share of the excess savings accumulated during the health crisis is concentrated among higher-income households, to such an extent that households in the bottom income quintile barely increased their savings in this period.