James Ward, PA
Households saved more than €31 billion in 2020, new figures from the Central Statistics Office (CSO) show.
Savings made during the pandemic have brought the financial net worth of households to an all-time high of €312.8 billion, the CSO said.
It is almost triple the level of savings being made prior to the pandemic and has been driven by a combination of higher incomes and lower consumer spending.
Some €16 billion was added in deposits in 2020, far outstripping the €12 billion added in 2006, at the height of the SSIA (Special Savings Incentives Accounts) scheme.
CSO statistician Peter Culhane said: “Households saved more than €31 billion in 2020, most of which is sitting on deposit with banks according to figures released by the CSO today.
“This is almost three times the level of saving before the pandemic and is the result of higher household incomes and lower consumer spending.
“Incomes for those who continued to work through the restrictions rose on average, while an €8.8 billion government intervention mitigated the decline in incomes for those out of work because of the pandemic.
“This extra saving brought household financial net worth to an all-time high of €312.8 billion in 2020.
“Wealth held in fixed assets such as houses is in addition to this.
“The addition of €16 billion in deposits was the biggest area for asset growth.
“For comparison, in 2006, at the height of the SSIAs, less than €12 billion was added to deposits.
Households saved over €31 billion in 2020, bringing their financial net worth hit an all-time high of €312.8bnhttps://t.co/UJtH1VllbP #CSOIreland #Ireland #NationalAccounts #Economy #Economics #Macroeconomics #EconomicIndicators
#EconomicActivity #Output #ValueAdded pic.twitter.com/0smgJr3hGc
— Central Statistics Office Ireland (@CSOIreland) November 2, 2021
“Saving also went into paying off debt (a decrease in loan liabilities), pensions and real assets like new homes.”
But the savings boom for households also produced a decline in profits for Irish companies, particularly the travel and hospitality sectors, with revenues dropping by 8 per cent.
In contrast, foreign multinational corporations, mainly operating in the fields of technology and pharmaceuticals, saw their profits surge by around 12 per cent.
The State's GDP in 2020 was €373 billion, although experts warned the impact of the pandemic made key indicators such as this less meaningful.
Mr Culhane said: “Ireland’s globalised economy complicates some of the common economic indicators, like GDP and private sector debt.
“The impact of the pandemic in 2020 also makes the usual headline indicators less meaningful.
“These statistics in the sector accounts provide a richer picture which analysts can use to delve more deeply into the structure and trends in the economy.”