Corona crisis slows down financial asset accumulation of private households in Germany
The consequences of the spread of the corona virus are also increasingly noticeable in the savings behaviour of Germans. According to our estimates, disposable income is likely to fall by a good one percent this year. At the same time, private consumption is collapsing, so that the savings rate is expected to rise to 12.5 percent. That would be the highest savings rate since 1992.
However, many private investors do not know where to put their savings. In recent years, the persistently low interest rates have already caused a huge investment backlog among traditionally rather risk-averse private households. In March, the corona-induced price slumps on the stock markets then led to high sales of securities and net outflows of investment funds. This further exacerbated the money investment backlog. By the end of the year, the share of funds parked in the form of demand deposits and cash is expected to grow to around 30 percent of total private financial assets.
At the same time, the extremely low and in some cases even negative interest rates and the losses in value of shares and funds are slowing down the growth of financial assets considerably. Despite a historically very high savings rate, the financial assets of private households in Germany are expected to grow this year by only 2.1 percent to around 6.8 trillion euros. Euro.
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