The European Central Bank argues that the euro zone is an indicator of household savings and continues to exceed the pandemic level by effectively reducing the use of and therefore the economy’s recovery. But it is predicted that the situation will gradually return to normal conditions, reports Reuters.
Based on recent reported data, in the second quarter of last year euro zone households saved 15.7 percent of their reported discretionary incomes. This is significantly more than the Covid-19 pandemic level which was a slight 12 – 13 per percent.
ECB emphasises that households can still increase their savings by rebuilding the wealth lost due to a large inflation. But this will have a negative influence on the consumption level, while this will continue to grow the economy in the near future.
“With rising inflation, over the past two years, the net value of house farm firms has decreased, which has increased their opportunity to rebuild their wealth” – the ECB pointed out and added, that increasingrealincomeandhighrealinterestrateshavealsoincreasedsavings.
Despitethisconcernaboutinsufficientconsumption,theEuropeanCentralBankisoftheopinionthathouseholdexpenditurewillincreaseovertime.
