Households and non-financial corporations in the euro area: fourth quarter of 2023

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Households and non-financial corporations in the euro area: fourth quarter of 2023

Households and non-financial corporations in the euro area: fourth quarter of 2023


9 April 2024

  • Households’ financial investment increased at broadly unchanged rate of 1.9% in fourth quarter of 2023
  • Non-financial corporations’ financing increased at broadly unchanged rate of 0.6%
  • Non-financial corporations’ gross operating surplus increased at annual rate of 1.7%, after 3.6% in previous quarter

Chart 1

Household financing and financial and non-financial investment

(Annual growth rates)

Sources: ECB and Eurostat.

Data for household financing and financial and non-financial investment

Chart 2

NFC gross-operating surplus, non-financial investment and financing

(annual growth rates)

Source: ECB and Eurostat.

Data for NFC gross-operating surplus, non-financial investment and financing

Households

Household gross disposable income increased in the fourth quarter of 2023 at a lower annual rate of 5.7% (after 6.3% in the third quarter) as the main components grew at lower rates: compensation of employees increased at a rate of 5.9% (after 6.6%), and gross operating surplus and mixed income of the self-employed increased at a rate of 4.4% (after 6.4%). Household consumption expenditure grew at a lower rate of 3.9% (after 5.2%).

The household gross saving rate increased to 14.3% in the fourth quarter of 2023, compared with 14.0% in the previous quarter.

Household gross non-financial investment (which refers mainly to housing) grew at an annual rate of 2.3% in the fourth quarter of 2023, after 1.3% in the previous quarter. Loans to households, the main component of household financing, increased at a lower rate of 0.7% (after 1.0%).

Household financial investment grew at a broadly unchanged rate of 1.9% in the fourth quarter of 2023. Among its components, currency and deposits (0.9% after 0.5%), debt securities (63.4% after 60.1%) and investment in pension schemes (3.0% after 2.5%) grew at higher rates. The acceleration in these investments was mostly offset by lower growth rates of investments in shares and other equity (0.3% after 0.8%) and life insurance (-0.8% after 0.0%).

Household net worth increased at a broadly unchanged rate of 1.2% in the fourth quarter of 2023. While net financial assets grew also due to valuation gains in addition to investments, non-financial assets decreased due to valuation losses exceeding investments. Housing wealth, the main component of non-financial assets, declined (-2.5%) more than in the previous quarter (-1.3%). The household debt-to-income ratio decreased, to 86.9% in the fourth quarter of 2023 from 92.7% in the fourth quarter of 2022.

Non-financial corporations

Net value added by NFCs increased at an annual rate of 5.1% in the fourth quarter of 2023 after 6.5% in the previous quarter. Gross operating surplus grew at a rate of 1.7% after 3.6% in the previous quarter, and net property income (defined in this context as property income receivable minus interest and rent payable) decreased (-8.7%, after 1.9%). As a result gross entrepreneurial income (broadly equivalent to cash flow) increased at a lower rate (0.5%, after 3.4%).[1]

NFCs’ gross non-financial investment increased at an annual rate of 5.3% (from -11.4%).[2] NFCs’ financial investment grew at an unchanged rate of 1.4%, compared with the previous quarter. Among its components, loans granted increased at a higher rate of 4.0% (after 2.1%), while investment in shares and other equity grew at an unchanged rate of 1.1%.

Financing of NFCs increased at a broadly unchanged rate of 0.6%. Loan financing grew at a higher rate of 1.2% in the fourth quarter of 2023 (after 0.7%), and the growth rate of financing via the issuance of debt securities by NFCs also increased (2.2%, after 1.9%). Equity financing grew at an unchanged rate of 0.3%. Trade credit financing grew at a rate of 0.7% (after -0.5%), while other liabilities such as other accounts payable excluding trade credits decreased.[3]

NFCs’ debt-to-GDP ratio (consolidated measure) decreased to 67.6% in the fourth quarter of 2023, from 71.7% in the same quarter of the previous year; the non-consolidated, wider debt measure decreased to 126.0% from 132.9%.

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Notes


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