The uncertainty economy shaped how households managed wealth, with savings reaching a new high in cash and deposits totaling 1.078 trillion euros last year. Even as inflation remained stubborn and purchasing power eroded in 2021, households saved more, while institutions holding these products sometimes paused higher-yield options. Overall financial wealth for families, calculated as assets minus financial liabilities, edged down by 0.04 percent to about 1.95 trillion euros, reflecting market slumps driven by inflation and the war in Ukraine.
Asset valuations show that financial holdings reached 44.981 billion euros, yet the market experienced a 46.263 billion euro write-down, shrinking the total portfolio value by 1.282 billion euros to roughly 2.72 trillion euros, a 0.04 percent decline, according to data released by the Bank of Spain this week. Among the major items, the mutual fund portion gained 12.425 billion euros in net investment, but overall dropped by 32.013 billion euros. For listed shares, life insurance, and retirement funds, both asset values and net sales moved lower, underscoring the challenging investment environment.
Consequently, the home portfolio suffered declines in mutual funds, down 7.64 percent to 386.563 billion euros, and in insurance and pension funds, down 14.27 percent to 332.743 billion euros. Conversely, cash and deposits, along with equity stakes in companies, rose, with shares increasing to 832.633 billion euros as revaluations in unlisted holdings more than offset losses in listed equities. The composition shows cash and deposits growing their share of total household financial assets from 37.9 percent to 39.6 percent, while the share of equities climbed from 29.3 percent to 30.5 percent. The mutual fund portion declined from 15.3 percent to 14.2 percent, and the insurance and pension funds share remained around 12.2 percent, signaling a shift toward more liquid assets.
more debt
From the last quarter before the pandemic (end of 2019) to the present, household liabilities rose by 161.753 billion euros, marking a 17.6 percent increase in cash and deposit holdings. This indicates that the most liquid and conservative savings have grown almost uninterrupted amid ongoing uncertainty and repeated shocks. At the same time, families increased their exposure to corporate equity by 113.843 billion euros, up 15 percent, and mutual funds by 40.262 billion euros, up 11.6 percent, while holdings in insurance and pension funds declined by 51.153 billion euros, a drop of 13.3 percent.
In tandem with some easing in the growth of household financial assets, last year saw a subtle uptick in debt levels by 0.25 percent, adding 1.98 billion euros to total debt, reaching 766.857 billion euros. Loan origination numbers edged down from 704.211 to 702.788 billion, yet other accounts payable rose from 42.720 to 46.262 billion. Household financial debt relative to GDP stood at 57.8 percent, while overall asset levels reached 205.4 percent, indicating financial wealth equaled about 147.6 percent of GDP. On the corporate side, firms reduced their debt by roughly 20.5 billion euros, down 2 percent to about 957.6 billion euros, pulling their debt-to-GDP share from 81 percent to 72.2 percent.