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Strong growth in household savings in Sweden

Thursday, 30 August 2012
Households' financial savings in Sweden increased by Skr 69 billion during the second quarter of this year.

Nevertheless, financial wealth decreased by Skr 27 billion, mainly because of the negative development of the stock market, report Statistic Sweden.  These high financial savings were largely due to bank deposits from households, which increased by Skr 50 billion.

At the same time, increased borrowing continued to be subdued. From a historical perspective the financial savings of Skr 69 billion during the quarter was a record level. The financial savings are calculated by taking transactions in financial assets and subtracting the transactions in debts. Transactions in assets increased by Skr 101 billion while transactions in debts increased by Skr 32 billion. The increase on the asset side is above all due to a sharp increase in bank deposits. Households' net purchases of investment funds for Skr 5 billion also contributed to a lesser degree.

On the liabilities side, the increase of loans was weaker than it usually is during a second quarter. The trend for increased loans has also dropped in recent years. Even though financial savings increased sharply during the quarter, households' financial wealth decreased by Skr 27 billion. The Stockholm Stock Exchange fell 6.5 percent during the period; because households' assets largely consist of direct and indirect ownership of shares, the downturn on the stock market has a significant influence on financial wealth.

From a historical perspective, households' assets in bank accounts increase more during the second quarter than in other quarters of the year. This is because share dividends and tax refunds are primarily paid during this quarter. Even considering these factors, bank deposits were unusually high during the second quarter this year and increased by Skr 50 billion. At the end of the second quarter, total assets of households amounted to Skr 1 189 billion. In light of the increased concern about the European economy, households looked for safer investments.
News source: Statistic Sweden




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