The household saving rate declined from 14.5% in the first three months of 2024 to 12.7% in the second quarter.
Income declined while consumption rose compared with Quarter 1 (Q1) 2024, after adjusting for seasonal factors.
Saving was around the same as a year ago in Q2 2023, but because income has increased since then, the saving is a smaller proportion of income, and so the rate is lower.
The unadjusted saving of households was €6.7bn, of which €3.8bn was added to capital stocks, mainly dwellings. The remainder was added to deposits or other financial assets or used to pay off financial liabilities such as mortgages.
For the economy as a whole Gross Domestic Product (GDP) declined compared with Q2 2023 (current prices, not seasonally adjusted), but this mainly affected foreign-controlled non-financial corporations. Better measures of the domestic economy such as Gross National Income (GNI) were up slightly.
There were large sales of intellectual property to other countries in the quarter. This was reflected in lower total net capital investment, and higher exports of services.
With these large exports of intellectual property, the current account balance grew sharply to €35bn.
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Statistician's Comment
The Central Statistics Office (CSO) has today (03 October 2024) released the Institutional Sector Accounts Non-Financial for Quarter 2 (Q2) 2024.
Commenting on the release, Peter Culhane, Statistician in the National Accounts Analysis & Globalisation Division of the CSO, said:
"Households saved 12.7% of their income in April, May, and June (Q2) 2024 (seasonally adjusted). This was down on the first quarter, when it was 14.5%.
The saving rate is the proportion of income that is left over after current consumption. Higher volumes as well as higher prices contributed to consumer spending increases in the quarter. Meanwhile overall household income declined slightly (quarter-on-quarter seasonally adjusted).
Overall Gross Domestic Product (GDP) was lower in Q2 2024 than in Q2 2023, even before adjusting for inflation. This was due primarily to reduced operating surplus (profits) of large foreign-controlled non-financial corporations. Gross National Income increased, suggesting the GDP reduction had a smaller effect on the domestic economy.
The quarter saw large sales of intellectual property. The disposal of capital assets is counted as a negative in the estimate of capital formation. This would have driven down GDP significantly, but the effect was countered by the increase in exports as these sales were to purchasers abroad. Thus, while these transactions caused a significant rise in the current account balance, they had little effect on GDP."