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Published on Monday, January 25, 2021

Spain | The Golden Rule

Household savings increased significantly during the second quarter of 2020, reaching 24.4% of gross disposable income. That is more than double the previous high seen in 2009. There are several reasons for this.

Key points

  • Key points:
  • The first is to do with uncertainty. As in the previous crisis, in the face of deteriorating job prospects and wages, households decide to save in order to be able to cope with less favorable conditions.
  • The second reason relates to the income support provided by policies implemented during the first months of the crisis.
  • The third is that, unlike other crises, many households literally could not spend. For example, higher income bracket households spend a greater proportion of their income on travel, transport and eating out.
  • The fourth reason concerns the impact that the crisis has had on companies and their balance sheets, having increased indebtedness and reduced capital relatively.
  • Finally, there is much uncertainty around economic policy right now. We do not know exactly what the final bill will be for public administrations, nor do we know what reforms will have to be implemented in the coming years.

Associated documents for downloading

  • Report (PDF) Miguel_Cardoso_La_regla_de_oro_Expansion_WB.pdf Spanish January 25, 2021

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