After rising during the pandemic, the household saving rate in the euro area fell back to its pre-pandemic average by mid-2022. Since then, it has risen again noticeably, in the wake of recent severe economic shocks. Empirical evidence suggests that rising real incomes and high real interest rates, together with negative real wealth effects, have pushed up household savings over the last two years. With these factors likely to persist for some time, the saving rate is expected to remain high in the near term, although it is likely to settle below its current level.
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