Households and non-financial corporations in the euro area: fourth quarter of 2021

5 April 2022

• Households' financial investment increased with annual rate of growth of 3.3% in fourth quarter of 2021, after 3.9% in third quarter of 2021
• Non-financial corporations' financing grew at higher annual rate of 3.4% (after 2.7%)
• Non-financial corporations' gross operating surplus increased at lower annual rate of 7.5% (after 8.9%)

Chart 1. Household financing and financial and non-financial investment

(annual growth rates)

Chart 2. NFC gross-operating surplus, non-financial investment and financing

(annual growth rates)

Households

The annual growth rate of household gross disposable income stood broadly unchanged at 3.4% in the fourth quarter of 2021. Gross operating surplus and mixed income of the self-employed increased at a higher rate of 7.1% (after 4.4%), while compensation of employees grew at an unchanged rate of 5.8%. Household consumption expenditure grew at a higher rate of 10.1% (after 5.8%).

The household gross saving rate was 17.3% in the fourth quarter of 2021, compared with 18.6% in the previous quarter (calculated from four-quarter sums).

The annual growth rate of household gross non-financial investment (which refers mainly to housing) increased to 19.1% in the fourth quarter of 2021, from 17.9% in the previous quarter. Loans to households, the main component of household financing, increased at an unchanged rate of 4.0%.

The annual growth rate of household financial investment decreased to 3.3% in the fourth quarter of 2021, from 3.9% in the previous quarter. Among its components, currency and deposits grew at a lower rate of 5.0% (after 6.2%). Shares and other equity increased at an unchanged rate of 3.1%, and investment in life insurance and pension schemes grew at a broadly unchanged rate of 2.2%.

Household net worth grew at a lower annual rate of 7.0% in the fourth quarter of 2021 (after 7.3% in the previous quarter), driven mainly by a slower increase in financial assets. The continued growth of the net worth was mainly due to high valuation gains in non-financial assets, followed by financial investment and valuation gains in financial assets. Housing wealth, the main component of non-financial assets, grew at a higher rate of 7.3% (after 7.0%). The household debt-to-income ratio increased to 96.8% in the fourth quarter of 2021 from 96.3% in the fourth quarter of 2020.

Non-financial corporations

Net value added by NFCs increased at a higher annual rate of 9.0% (after 8.5%) in the fourth quarter of 2021. Gross operating surplus grew at a lower rate of 7.5% in the fourth quarter of 2021, after 8.9% in the previous quarter, while net property income (defined in this context as property income receivable minus interest and rent payable) increased. As a result gross entrepreneurial income (broadly equivalent to cash flow) increased at a higher rate of 11.3% (after 8.5%).^[1]

NFCs’ gross non-financial investment increased at a higher annual rate of 16.5% (from 14.4% in the previous quarter).^[2] NFCs’ financial investment grew at a higher rate of 5.7% (after 5.0%). Investment in currency and deposits, loans, shares and other equity as well as other financial assets (mainly trade credits) increased at higher rates, while net sales of debt securities continued.

Financing of NFCs increased at a higher annual rate of 3.4% (after 2.7% in the previous quarter), as the growth rates of financing via loans (4.3% after 3.4)^[3], debt securities (4.2% after 2.0%) and trade credit and advances (14.6% after 10.0%) increased. NFCs’ equity financing grew at an unchanged rate of 1.4%.

NFCs’ debt-to-GDP ratio (consolidated measure) decreased to 79.6% in the fourth quarter of 2021, from 81.8% in the same quarter of the previous year; the non-consolidated, wider debt measure declined to 143.7% of GDP (from 144.7%).

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Notes

• The annual growth rate of non-financial transactions and of outstanding assets and liabilities (stocks) is calculated as the percentage change between the value for a given quarter and that value recorded four quarters earlier. The annual growth rates used for financial transactions refer to the total value of transactions during the year in relation to the outstanding stock a year before.
• Hyperlinks in the main body of the statistical release are dynamic. The data they lead to may therefore change with subsequent data releases as a result of revisions. Figures shown in annex tables are a snapshot of the data as at the time of the current release.