Updates: 03.03.2021 11:29
Released: 03.03.2021, 11:29
New York – Consumers in the world’s largest economies have accumulated an additional $ 2.9 trillion (CZK 62.7 trillion) at a time of pandemic-related movement restrictions. That’s significant cash, which creates the potential for a strong recovery from the pandemic recession, Bloomberg said, citing its calculations.
Households in the US, China, Britain, Japan and the largest eurozone countries were saving money at a time when a coronavirus pandemic forced them not to go shopping but stay at home. And they are likely to continue to do so, as restrictions persist and governments distribute stimulus aid.
The United States accounts for more than half of the total, or $ 1.5 trillion, the figures show. This is at least twice the average annual growth of gross domestic product (GDP) recorded during the last expansion, and this amount continues to grow.
Such savings should support the economic recovery once covid-19 is brought under control and vaccination is expanded. Optimists believe in the wave of shopping that people will return to shops, restaurants, entertainment venues, tourist spots and sporting events, and will also speed up purchases of expensive items, which they now mostly put off. However, some doubt and consider whether it would be better not to use the money to pay off debts or whether consumers will not continue to accumulate it until the health crisis is completely over and the labor market is in better shape.
In the US, spending the money saved last year would lead to economic growth of up to nine percent instead of the expected 4.6 percent, Bloomberg estimates. If the savings are not spent, the economy is likely to grow by only 2.2 percent.
“The summer of 2020 has proved to be a false dawn, but it has also shown how quickly the economy can bounce back when the covid-19 restrictions are lifted,” said Bloomberg Economics economist Maeva Cousin. According to her, huge household cash savings are one of the reasons why demand should increase sharply.
The United States is not the only country with big savings. Chinese households transferred 2.8 trillion yuan (CZK 9.4 trillion) more to their bank accounts than they normally would. Similarly, in Japan, the volume of deposits increased by 32.6 trillion yen (CZK 6.6 trillion) and in Britain and 117 billion pounds (CZK 3.5 trillion). In the largest euro area countries, savings increased by 387 billion euros (10.1 trillion CZK), of which in Germany by 142 billion euros.
One of the factors that could increase the desire to spend is low interest rates. These reduce the attractiveness of savings accounts. On the other hand, there is a risk that people will decide to use the savings to repay the debt or keep a reserve due to ongoing health risks or job concerns.
However, not everyone has enough money. They saved mainly those who earn the most, while lower-income households were forced to make savings and are likely to reduce them.