Households in developed countries have made huge fortunes: a Financial Times article Globally, household savings grew by about $ 5.6 trillion in the last year, which is why many analysts are hoping for a really significant economic recovery after the reopening.
The paper’s article is based on Moody’s analysis that, compared to 2019 consumer data, households held a lot of money in 2020, more than six percent of global GDP.
According to France Télécom, there is a return to consumer confidence in the world, which means that soon people will start spending the allocated money again. And if only a third of the money set aside is spent by households, it could increase global GDP by up to 2 percent this year and next, according to Moody’s.
The reason for the increased savings is that although the global economy entered into an unprecedented recession last year due to the epidemic, it did not affect the incomes of many families in many countries. Among those who did not work directly in the sectors concerned (tourism, hospitality, etc.), many were able to keep their jobs but were able to spend on much less things, as many services were not available, and it was not possible to go to them outside the country. . Consumption could also be curbed, of course, by the fact that the future looked so bleak, there were many who spent not only because they weren’t anywhere, but also because they were afraid of what the future would hold. Now, as the debate reopens, these fears could disappear.
It is also important that in developed countries, governments have consistently adopted serious stimulus packages and poured money into households to restart the economy. However, people did not spend much of this, but it was set aside for a more peaceful period.
This stimulus package may also explain why Hungary, due to the comparison at France Télécom, is the country with the least increase in household savings. In Hungary, the government of Fides has never provided generous aid: while governments across Europe have attempted to provide direct financial aid to families by mobilizing more serious funds, this has not happened in Hungary.
The graph in the Financial Times article shows the change in the savings rate in 22 OECD countries, and it can be seen that the smallest increase was in Hungary by far. A survey last year showed that it is only in Hungary Half of the households have sufficient reserves for two months.
The France Telecom article also notes that the increase in the savings rate in both developed and developing countries has been uneven and mainly affected the wealthiest households. This means that the outcome we mentioned often for the epidemic is also achieved here: the wealthy fare better with the downtime, while the poorer households typically have worsened.