While the net disposable income of households fell from 2008 to 2009, there was a sharp rise in household savings, according to new figures from the Central Statistics Office (CSO).
The latest data indicates that net savings of households rose from €3.6 billion in 2008 to over €11 billion in 2009. During the same period, the derived household net saving ratio, which expresses net savings as a percentage of disposable income, increased from 3.9 per cent to 12.3 per cent.
The net disposable income of households fell by €21.1 billion, from €91.7 billion in 2008 to €89.6 billion the following year.
Household consumption declined by €10 billion to €81 billion, the data shows.
According to CSO, in the period 2002 to 2008 household savings were not adequate to fund household investment in property, thereby necessitating recourse to borrowing. The sharp decline in capital investment by households between 2008 and 2009 resulted in the household sector providing net lending of €8.4billion n to other sectors of the economy last year in contrast to having to raise net borrowing of €5.6 billion in 2008.
|The figures reveal that financial corporations had net savings of €1.8billion in 2009 – down from €3.3billion a year earlier.
Non-financial corporations had net savings of €5.8 billion as against €9.7 billion in 2008.
Meanwhile, the Government sector had a savings deficit of €14.4billion in 2009 – an increase of €9.9billion compared with the previous year’s deficit.
The net disposable income of Government declined from €28.3billion to €16.7billion mainly through declines in taxes and increased transfer payments.
