Portugal Experiences Second-Largest Decrease in Private Saving within the EU
Headline: Eurozone and EU Family Savings Rates and Private Consumption Show Mixed Trends in Q1 2025
The latest economic data for the Eurozone and EU reveals a complex picture of family savings rates and private consumption compared to the last quarter of 2024.
Savings Rate Trends:
The household saving rate in the Eurozone showed a marginal increase of 0.1 percentage points in the first quarter of 2025, while the broader EU saw a rise of 0.2 percentage points [3]. Notably, Germany, one of the major EU economies, reported a savings rate of around 20% in 2025, significantly above the EU average, reflecting a shift towards increased financial security over consumption due to inflation concerns and economic pessimism among consumers [1].
However, despite this rise, the Euro area net saving amount decreased slightly to €799 billion in the four quarters up to Q1 2025, indicating some fluctuations in total savings [4][5].
Private Consumption Trends:
Household real consumption per capita in the Eurozone declined by 0.2% between January and March 2025, down from a 0.4% increase previously, signaling a weakened consumption momentum early in 2025 [3]. This drop is attributed largely to increased taxes and social contributions, which negatively affected disposable income despite rising wages [3].
Lending to households rose by 2.0% year-on-year in May 2025, indicating stronger credit demand possibly aligned with efforts to support spending. However, consumer willingness to spend remains cautious, especially in discretionary sectors [2][1].
Additional Data Points:
The household debt-to-income ratio in the Euro area decreased slightly to 81.7% in Q1 2025, suggesting some households may be deleveraging, which might constrain consumption growth [4]. Economic uncertainties, inflation, and shifts in consumer preferences toward savings and essential spending are impacting private consumption trends.
Summary:
Compared to Q4 2024, family savings rates in the Eurozone and EU have increased slightly in early 2025, with Germany exhibiting a marked surge in savings behavior. Meanwhile, private consumption faces downward pressure, with a slight decline in per capita real consumption observed in the Eurozone. These trends collectively hint at cautious consumer behavior amid economic uncertainty, which continues to influence the balance between saving and spending [1][3][4].
- Private consumption in the Eurozone decreased by 0.2% between January and March compared to an increase of 0.6% in the same quarter last year.
- Greece recorded the largest quarterly decrease in the savings rate of families (-3.6 p.p.).
- Construction production in the EU increased, with Portugal having the third largest increase.
- The savings rate of families in the Eurozone decreased to 15.3% in the latest quarter compared to 15.5% in the fourth quarter of 2024.
- Denmark recorded a quarterly increase in the savings rate of families (0.6 p.p.).
- Belgium and the Netherlands both recorded a quarterly increase in the savings rate of families (0.7 p.p. each).
- Private consumption per capita in the EU decreased by 0.3% between January and March compared to an increase of 0.7% in the same quarter last year.
- Austria recorded a quarterly decrease in the savings rate of families (-1.7 p.p.).
- Private consumption per capita in the EU decreased by 0.4% compared to the previous quarter.
- 'Per capita' income of families in the Eurozone decreased by 0.1% between January and March.
- Private income in the EU decreased by 0.1% compared to a growth of 1.1% in the first quarter of 2024.
The slight increase in the household saving rate in the Eurozone to 15.3% in Q1 2025 indicates a shift in financing priorities, showing a focus on financial security over consumption. Despite the rise in savings rates, the decrease in per capita private consumption in the Eurozone by 0.2% between January and March 2025 suggests cautious spending habits among consumers.
