Households in the Republic continued to save at an elevated rate last year, new Central Statistics Office (CSO) data reveals, maintaining a trend that began during the Covid-19 pandemic.
Savings hit €19 billion in 2023, of which around half went into fixed assets such as homes, with the other half going into deposits and other financial assets.
This represented a savings rate of 12.4 per cent for the full year, essentially unchanged from 12.2 per cent in 2022, according to the CSO’s institutional sector accounts for the final three months of last year.
The savings rate also remained above the pre-Covid long-term average, according to the data. The rate at which households put away their disposable income spiked during the pandemic, peaking at an all-time high of 34 per cent in the second quarter of 2022 when shops, pubs, hotels and other businesses were closed due to public health restrictions.
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“Households saved 12.09 per cent of their income in October, November and December 2023 and 12.4 per cent in 2023 as a whole,” said Peter Culhane, statistician in the national accounts analysis and globalisation division of the CSO.
“The saving rate has averaged over 12 per cent in the last two years, above the long-term pre-Covid average. The expanding numbers of people working are driving up household income as well as higher income on assets such as pension funds. Meanwhile consumption is also going up due to higher volumes as well as higher prices.”
Thursday’s figures also indicate a sizeable decline in exports last year from €202 billion in 2022 to €169 billion. The multinational sector, meanwhile, saw a decline in profits but “significant growth on investment income from overseas”, the CSO said.
Mr Culhane said overall gross domestic product (GDP) was lower in 2023 than 2022, even before adjusting for inflation.
“This was due to changes by large foreign-owned non-financial corporations in how they configure their global operations,” he said. “Their Irish units reduced their purchases of manufacturing services significantly, but at the same time, more investment income (dividends and reinvested earnings) flowed into these corporations from abroad. These changes largely account for the significant decline in net exports and for the decline in net lending being smaller.”
Imports of intellectual property were also “significant” last year, he said.
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