Household savings plummet in Portugal since 1970

 In Money, News

Portuguese household savings are three times lower than they were 30 or 40 years ago, official data showed on Saturday, although savings did rise during the pandemic.

By Marina Watson

Household savings in Portugal in 2019 represented 7.0% of household disposable income, local database Pordata revealed.
Household savings in Portugal are half that registered in Germany, France and Sweden, the figures show. The latest percentage is slightly above 6.8% registered in 2018 but well below 19.3% registered in 1989 and 22.3% registered in 1979.
Family savings in Portugal were 4.9% of GDP in 2019 and 4.7% of GDP in 2018 according to provisional figures – half of that registered in Germany, France, Sweden and the Netherlands, where family savings ranged between 8.2% and 11.4%. Out of the 24 countries included in 2018, only Greece had negative savings, of -1.2%.
The figures also show that last year, in Portugal, one in three people were unable to face unexpected expenses – slightly higher than the EU average of 31%.
The country’s Purchasing Power standard in 2018 was 12,785, with the country in 20th place in the EU27 ranking. Luxembourg was first in the ranking with 38,253 PPS and Romenia last with 7,311.
Saving rates around the world have taken a hit recently with the pandemic as people trimmed their spending due to business closures and infection fears, with many people also saving money from working at home, according to Eurostat, the statistical office of the European Union (EU).
The Eurozone’s household saving rate was 24.6% in the second quarter, up from 16.6% registered in the first quarter when member states were still implementing containment measures to curb the pandemic.
Portugal’s economy expanded 13.2% in the third quarter but contracted sharply compared to last year after the nationwide lockdown led to a record drop of 13.9% in April-June. The pandemic has hit the tourism industry hard as cases keep creeping up, despite the country being initially praised for its swift response.
According to figures released by the European Commission in July 2020, the EU-27’s gross household adjusted disposable income was valued at EUR 9 781 billion in 2018, equivalent to approximately three quarters (72.5 %) of the value of gross domestic product (GDP) . Germany accounted for the highest share of the EU-27’s gross household adjusted disposable income, 25.6 % of the total, followed by France (18.7 %) and Italy (14.0 %).