Households savings steady but back at 2019 levels

Household savings ratio between income and expenditure was about 10% in the first three months of the year, down sharply from the rate of almost 14% in the same quarter a year earlier, CSO data shows

Economists had predicted the savings built up during the pandemic years would help offset future shocks to consumption in the economy, such as any inflation shock. 

Households are still saving but the amounts they are putting away compared with spending are back to levels before the onset of the pandemic, the latest official figures suggest.

The Central Statistics Office said its household savings ratio between income and expenditure was about 10% in the first three months of the year, little changed from the previous quarter, but down sharply from the rate of almost 14% in the same quarter a year earlier. 

The savings figures, which come from the CSO's in-depth focus on households and firms, are important data because many economists had predicted the savings built up during the pandemic years would help offset future shocks to consumption in the economy, such as any inflation shock. 

The CSO figures appear to bear this out. The figures show the savings rate is now back to close to 2019 levels, having "followed the trajectory of the EU as a whole". 

"Ireland's saving rate was below the EU total before the pandemic but higher during the covid-19 restrictions. Data available so far indicates that it is now returning a rate below the EU aggregate," the CSO said. 

The fallout from inflation is reflected in figures, showing consumption and income were little changed from the final three months of 2022 when higher prices are taken into account.