Gross savings in the Eurozone surged by more than 50% in 2020 due to coronavirus related lockdowns and reduced spending, which is expected to result in a consumption boom in 2021.
Ludovic Subran
Ludovic Subran, group chief economist at financial service provider Allianz Group, shared an article on gross savings in the Eurozone crossing more than €450bn ($545.56bn) or 4% of GDP due to reduced spending and movement restrictions imposed due to the coronavirus pandemic. Government support measures such as unemployment schemes, lower taxes and higher subsidies also contributed to the rise in savings.
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Two thirds of these excess savings were deposited into bank accounts and the remaining was invested in capital markets. Germany (27%) and Italy (21%) accounted for the highest share of savings invested in equity among the Eurozone countries. Pent-up consumption in 2021 could reach €42bn ($50.6bn) in Germany and €68bn ($82.44bn) in the UK based on the level of excess savings.
Further, another €200bn ($242.47bn) in excess savings could be generated in 2021 due to renewed lockdowns imposed in the first half of 2021. Subran noted that these savings should be utilised effectively to modernise and decarbonise the European economy.
In 2020, gross #savings in the #Eurozone increased by +50%, and “excess savings” stood at >EUR450bn, or >4% of #GDP. The best way to make use of this savings: Accelerate the modernization & #decarbonization of the European #economy. https://t.co/ltvskTyDKJ
— Ludovic Subran (@Ludovic_Subran) April 29, 2021
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By GlobalData
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https://twitter.com/bencasselman/status/1387746411056443392
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