In the second quarter of the year, household savings reached an unprecedented level in Spain, namely 22.5% of disposable income. Funcas has chosen the savings rate, particularly the one recorded in that period, as ‘The data of the year.’ Through this initiative, its researchers have highlighted a particularly significant firgure for the Spanish economy during this year about to end. Before the current crisis, the maximum savings rate for families was 12.1% in the second quarter of 2009, while the average in the period 1999 to 2019 was 8.2%.
As explained by Mª Jesús Fernández, senior economist at Funcas:
“The savings in the second quarter of this year were, fundamentally, forced savings. They were the result of the physical impossibility to consume due to the confinement and closure of numerous economic activities.
The other side of the story was a fall in economic activity of an equally unusual magnitude: GDP fell in the same period by 17.8%. M ª Jesus Fernandez argues.
“So this is why the figure chosen, the savings rate of the second quarter, summarises like no other, from the economic point of view, the extraordinary and dramatic situation experienced during this period.”
It is very likely that in subsequent quarters the savings rate has dropped since, although with restrictions and intermittently, businesses reopened and citizens regained mobility. “For some time it will remain at higher levels than before the pandemic,” the Funcas expert predicts “because now, as happened in the 2009 crisis, we will find another type of savings: precautionary savings or fear-driven savings. This type of savings is the one generated voluntarily in the face of uncertainty and job destruction resulting from the prolongation of the crisis. To this we could add a new type of saving: that which results from the voluntary restriction on outings and social interaction due to fear of contagion from Covid-19.
This is the fourth year in which Funcas has chosen “The data of the year.” In the three previous years, the record tourist arrivals (2017), the increase in new social security contributors with indefinite contracts (2018) and the drop in the default rate (2019) were selected.