Household disposable income fell by 1 per cent in the first quarter of the year, new data from the Central Statistics Office showed today.
On a seasonally adjusted basis household spending was also lower over the three-month period, but savings crept higher, the report said.
Quarterly gross disposable income reached €21.68 billion in the first quarter, a fall of €213 million compare with the preceding period. While expenditure fell by €441 million, or 2.2 per cent, that led to an increase of €228 million in household savings, which are primarily used to pay down debt and fund property investment. That caused the savings ratio to rise from 9.7 per cent in the fourth quarter of 2012 to 10.8 per cent in the first quarter of 2013.
Looking at the economy as a whole, gross savings rose by €1.57 billion in the final months of 2012 to €5.75 billion in 2013.
Non-financial corporations had gross savings of €4.8 billion, a rise of €1.5 billion year on year as the net property income payable by the sector fell. Net lending of the sector increased to €2.7 billion.
The CSO also examined the Government’s borrowings and savings. It found that the Government’s savings deficit narrowed slightly to €3.6 billion, as increased taxes took effect. But the data also showed net borrowing was €437 million higher at €5.3 billion in the quarter, an increase that the CSO attributed to a capital transfer payment to the financial sector for bank recapitalisation in early 2013.
Net borrowing by the rest of the world from Ireland reached €1.23 billion in the first three months of the year, a rise from the €661 million recorded a year earlier. The CSO said this rise was due to the higher levels of gross savings in the economy.
