Household finances in Spain show a mixed quarterly picture
Spain’s household wealth, defined as the balance between accumulated savings and debts, declined by 1% over three months. Inflation pushed the metric to 1.89 trillion euros at the end of June, though the year-on-year change was a modest 0.3% increase.
Bank of Spain released the Financial Accounts of the Spanish economy on Monday, outlining the relationship between GDP and net financial assets. Net financial assets stood at 149.1% of GDP, marking a 14 percentage point drop from the previous year as the overall economy grew more than household wealth did.
Financial assets held by households, including cash, equities, deposits, and securities, slipped 0.2% in the June quarter to 2.67 trillion euros. On an annual basis, this category rose by 0.7%.
The central bank notes that the year-over-year rise mainly reflects net acquisitions of 63.6 billion euros in the prior year, driven largely by deposits and, to a lesser extent, equity stakes. These gains were partly offset by a negative revaluation of 44.9 billion euros.
Cash and deposits continue to dominate the structure of household financial assets, accounting for 29% of the total. In addition, capital holdings (including stocks and other participations) represent 40% when combined with mutual funds (14%) and insurance and pension funds (13%).
Within the asset mix, cash and deposits carried the strongest increase, lifting their weight by 1.7 percentage points from the previous year. Conversely, the share attributable to insurance and pension funds declined by 1.6 percentage points.
Family and corporate debt edges lower
The consolidated debt of households and non-financial corporations reached 1.679 trillion euros at the end of the second quarter, down 0.7% from a year earlier, though it remains 4.2% above the level before the pandemic. As a share of GDP, the debt ratio slipped to 132.2% compared with 146.1% a year earlier.
Interest in non-financial corporate debt shows a clear easing, falling from 979.1 billion euros in June 2021 to 961.2 billion a year later, which translates to 75.7% of GDP. If inter-company debt is included, the combined ratio rises to 98.5%.
Household debt, on the other hand, climbed from 712.0 billion euros in June 2021 to 717.6 billion, representing 56.5% of GDP at the end of the second quarter of 2022. This figure remains below the 61.5% level observed a year earlier and aligns with pre-pandemic norms.
Analysts note that the ongoing recalibration in debt levels reflects a mix of cautious borrowing, shifting investment habits, and the ongoing alignment of financial portfolios with evolving macroeconomic conditions. While debt remains a sizable portion of overall balance sheets, the recent easing seen in corporate liabilities contrasts with steady household exposure, indicating divergent dynamics across sectors.
Overall, the environment suggests households are prioritizing liquidity and defensive assets while companies continue to adjust leverage in light of debt maturities and investment needs. The Bank of Spain continues to monitor these indicators as part of its broader assessment of financial vulnerability and resilience in the Spanish economy.