Save on good times, for bad times too
The latest Bank of Spain data on the region’s economy shows how provinces and households saved during the past year. In Alicante, deposits remained resilient, bouncing back after the pandemic dip and reflecting a broader recovery in financial stability for families and businesses.
By the end of last September, Alicante’s private sector deposits stood at 36,205 million euros, a rise of 1.583 million euros from the same period in 2021. The 4.6 percent increase gained momentum through the second and third quarters of the year, underscoring a steady revival in economic activity. Tourism recovered as restrictions ended, boosting local employment and confidence, and contributing to new savings behavior as households built buffers against future shocks.
This period coincided with global tensions, including the Ukraine conflict and rising inflation, which pushed many to convert some profits from market normalization into precautionary savings, creating a cushion against potential downturns.
The people of Alicante saved 664 million in the bank in the second quarter
The combination of stronger labor markets, cautious spending, and the after-effects of the pandemic helps explain the increase in savings in the province. Francisco Llopis, director of studies at Ineca, describes the data as positive. He notes several contributing factors, including a solid labor market during those months, and suggests that inflation that had been eroding purchasing power did not yet force households to broaden their budgets as much as feared. In his view, if inflation had been higher, the rise in deposits could have been even larger.
Many customers continued to withdraw money from ATMs, highlighting a preference for liquidity some households still preferred to keep on hand amid uncertainty.
Llopis adds that the figure remained below the pre-pandemic peak, but shows a return toward the level seen before the health crisis. A record of 40,198 million reached full capacity, while Alicante branches stood at more than 38,000 million, with liquidity constraints easing for firms holding ICO loans.
Economists argue that lifting restrictions not only spurred tourism, but also encouraged second-home owners to bring money into their accounts, reinforcing a broader recovery in household finances.
The same line of reasoning points to a dual effect: improving the economy and heightened uncertainty that has led many families to postpone large purchases. Spending on durable goods remains subdued relative to overall consumption, underscoring a cautious attitude even as savings rise.
Some experts believe the deposit growth could reflect a long-running trend interrupted by the pandemic, now reasserting itself as the economy reopens and confidence returns.
positive balance
As deposits climb, Alicante’s overall financial balance improves. Savings increasingly exceed debts held by local firms and government, a sign of strengthening liquidity in the private sector. In September 2021, private sector credit stood at 36,301 million, and by the same month in 2022 it was 32,462 million, signaling a net improvement in the province’s financial position.
The broader picture shows a province gradually healing from the liquidity squeeze of the pandemic era, with households accumulating precautionary reserves while businesses work through outstanding balances and lines of credit.
ECB will continue to raise interest rates to reduce inflation
Looking ahead, observers wonder how central bank policy will shape savings and spending in the coming months. Bank of Spain statistics already show that inflation pressures are forcing many families to rethink their bank balances, with some regions seeing deposits dip as households spend down reserves. Conversely, provinces with strong tourism components, such as the Balearic Islands, Málaga, Tarragona, and Girona, report continued growth in savings volumes as tourism activity rebounds and incomes stabilize.
In light of these dynamics, the path of interest rates will influence how quickly savings evolve and how households balance the need for liquidity with the desire to purchase durable goods. The synchronization of a recovering tourism sector with cautious consumer behavior suggests a nuanced trajectory for Alicante and similar regions as the year progresses.