Household saving during the COVID-19 pandemic and implications for the recovery of consumption

Maarten Dossche, Dimitris Georgarakos, Aleksandra Kolndrekaj and Francisco Tavares

Economic Bulletin Boxes, 2022, vol. 5

Abstract: This box uses the ECB Consumer Expectations Survey (CES) to assess euro area household saving behaviour since the start of the coronavirus (COVID-19) pandemic. Most respondents reported that during the pandemic they were not able to increase their savings. Those that were able to do so reported that COVID-19-related restrictions/fear of infection and precautionary motives were the most important reasons for increasing their savings. In March 2021 the bulk of the savings accumulated during the pandemic were not expected to be spent until at least the spring of 2022. Most respondents expected to return to, but not exceed, their pre-COVID-19 levels of consumption as soon as pandemic restrictions were relaxed, suggesting limited scope for widespread pent-up demand during the recovery. Pandemic-related savings were concentrated among higher-income households with a relatively low exposure to energy-intensive expenditure. This limits the extent to which these savings are able to shield the ongoing recovery of consumption from the adverse impact of the recent surge in energy prices. JEL Classification: D12, D14, E21

Keywords: COVID-19; Energy expenditure; Pent-up demand; Savings (search for similar items in EconPapers)
Date: 2022-08
Note: 3577821
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