The latest release from the National Institute of Statistics in Spain shows a notable shift in household financial behavior in the first quarter. The household savings rate slipped to negative territory at minus 0.8 percent, marking the first negative reading since the first quarter of 2019. By comparison, the previous quarter posted a robust savings rate of 8.3 percent, underscoring a sharp change in how households managed their income during the period (INE).
In practical terms, households spent more than they earned during the quarter. Disposable income rose by 3.8 percent year on year, while consumer spending climbed to 181.147 billion euros, reflecting a 14 percent increase to a new high for the period. This surge in spending coincides with stronger consumption and a shift away from saving, illustrating a cautious but active domestic demand pattern (INE).
Another notable development was a significant rise in investment. Total investments increased by 33.4 percent, reaching 19.379 billion euros. This investment amount accounted for 7.6 percent of disposable income, the highest proportion observed since late 2012. The rise in investment signals a more proactive approach by households in financing growth, even as the overall savings rate turned negative (INE).
Consequently, overall household savings decreased by 1.427 billion euros in the first quarter, compared with 14.516 billion euros in the same period of 2021. The comparison points to a substantial contraction in savings still consistent with the broader trend of growing consumption and investment, illustrating a dynamic period for household finances (INE).
When seasonal and calendar effects are removed from the data, the household savings rate in the first quarter stands at 7.5 percent of disposable income, which is 2.1 percentage points lower than the previous quarter and marks the lowest level since the fourth quarter of 2019 just before the pandemic was declared. This adjusted figure highlights how much the quarter diverged from pre-crisis norms and reflects a temporary easing in savings as households engaged more in spending and investment (INE).
In this context, households were unable to finance the investments made during the first quarter purely from savings. As a result, there was a financing need of 21.535 billion euros, compared with a modest 0.574 billion euros financing requirement in the first quarter of 2021. This gap indicates a reliance on external financing or other sources to support the higher level of spending and investment during the period and points to a broader shift in household financial strategy (INE).