The household savings rate in the euro area stood at 15.3% in the third quarter of 2024, down marginally from 15.6% in the previous quarter, new data from Eurostat has revealed.
The change can be attributed to consumption increasing by 1.1%, which outpaced the growth in gross disposable income, which rose by 0.7%.
At the same time, the household investment rate decreased marginally, from 9.2% to 9.1%, as gross fixed capital formation decreased by 0.2%, even as gross disposable income grew by 0.7%, the data showed.
Euro area household saving rate down to 15.3% in Q3 2024 https://t.co/w0sHfCQAIK https://t.co/gxn3fLjJzr
— EU_Eurostat (@eu-eurostat.extwitter.link) 13 January 2025 at 10:27
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Profit share of businesses
In the third quarter of the year, the profit share of businesses (non-financial corporations) in the euro area increased slightly, from 38.7% to 38.8%.
This was driven by an increase in business compensation of employees and taxes less subsidies on production, which rose by 1.2%, although at a slightly slower rate than gross value added, which increased by 1.4%.
Business investment rate
The business investment rate in the euro area also saw an increase in the period, rising from 21.4% to 21.9% as business gross fixed capital formation increased by 3.7%, outpacing the 1.4% increase in gross value added.
Previous peaks, which were recorded in the second quarter of 2027, second quarter of 2019, fourth quarter of 2019 and first quarter of 2020, were related to large imports of intellectual property products, reflecting globalisation effects.
According to Eurostat, the gross saving rate of households (household saving rate) is defined as gross saving divided by gross disposable income, with the latter including the change in the net equity of households in pension fund reserves. Gross saving is the part of the gross disposable income that is not spent as final consumption expenditure. Therefore, the saving rate increases when gross disposable income grows at a higher rate than final consumption expenditure. Read more here.
