Euro area net saving slips as investment rises in third quarter

Euro area net saving fell to €863 billion in the four quarters to the third quarter of 2025, according to a report from the European Central Bank (ECB).

This compared with €877 billion recorded in the four quarters to the previous quarter and represented 6.9 per cent of euro area net disposable income.

Over the same period, euro area net non-financial investment increased to €590 billion, equivalent to 4.7 per cent of net disposable income.

The increase in investment was driven mainly by higher investment by non-financial corporations, the ECB said.

As a result, euro area net lending to the rest of the world declined to €304 billion, down from €347 billion in the four quarters to the previous quarter.

The ECB attributed this decline to lower net saving combined with higher net non-financial investment.

Households’ net lending remained broadly unchanged at €596 billion, corresponding to 4.8 per cent of net disposable income.

Net lending by non-financial corporations fell to €77 billion, or 0.6 per cent of net disposable income, from €88 billion previously.

Net lending by financial corporations decreased to €100 billion, equivalent to 0.8 per cent of net disposable income, from €110 billion.

At the same time, general government net borrowing increased, contributing more negatively to euro area net lending at -€469 billion, or -3.8 per cent of net disposable income.

Household financial investment grew at an unchanged annual rate of 2.6 per cent in the third quarter of 2025.

Growth in currency and deposits accelerated to 3.2 per cent, compared with 3.0 per cent in the previous quarter.

Investment in life insurance rose at a faster rate of 2.3 per cent, up from 2.1 per cent.

Net purchases of shares and other equity slowed to 2.4 per cent, from 2.6 per cent in the previous quarter.

Investment in pension schemes remained unchanged at 2.6 per cent.

Investment in debt securities declined at a slower pace of -0.5 per cent, compared with -1.5 per cent previously.

Households were net sellers of debt securities issued by monetary financial institutions and non-financial corporations.

At the same time, households were net buyers of debt securities issued by the rest of the world, other financial institutions and general government.

Overall, households were net sellers of listed shares.

By issuing sector, households sold listed shares of monetary financial institutions and non-financial corporations, while buying shares issued by the rest of the world, insurance corporations and other financial institutions.

Households further increased net purchases of non-money market investment fund shares, while net purchases of money market fund shares declined.

The household debt-to-income ratio fell to 81.4 per cent in the third quarter of 2025 from 82.1 per cent a year earlier.

The household debt-to-GDP ratio declined to 50.7 per cent, compared with 51.3 per cent in the third quarter of 2024.

Financing of non-financial corporations increased at a broadly unchanged annual rate of 1.5 per cent.

Equity financing grew at a stable rate of 0.7 per cent, according to the ECB.

Financing through debt securities accelerated to 2.4 per cent, from 1.9 per cent in the previous quarter.

Growth in trade credits increased to 5.1 per cent, up from 4.8 per cent.

Loan financing rose at an unchanged rate of 2.2 per cent.

Stronger growth in loans granted by monetary financial institutions and other financial institutions was offset by weaker growth in loans granted by non-financial corporations.

Loans from the rest of the world declined at a faster pace of -2.0 per cent, compared with -1.2 per cent previously.

The consolidated debt-to-GDP ratio of non-financial corporations fell to 65.9 per cent in the third quarter of 2025 from 67.3 per cent a year earlier.

Using the wider, non-consolidated measure, non-financial corporate debt declined to 136.4 per cent of GDP, down from 138.0 per cent in the third quarter of 2024.