The European Central Bank said euro area net saving remained broadly stable at €902 billion (~$1,025 billion) in the four quarters to Q1 2026, while net lending to the rest of the world increased.
Household financial investment accelerated, supported by stronger pension, insurance and debt securities investment.
Household debt stayed stable, and non-financial corporations’ debt-to-GDP ratio declined.
The ECB’s latest report on euro area economic and financial developments by institutional sector showed that households strengthened their financial position during the quarter, with net lending increasing to €688 billion from €591 billion, equivalent to 5.3 per cent of net disposable income.
Non-financial corporations (NFCs) also increased net lending to €113 billion from €92 billion, while financial corporations’ net lending fell to minus €1 billion from €86 billion. General government net borrowing widened to minus €493 billion, weighing on the euro area’s overall financial balance.
Household financial investment growth accelerated to 2.9 per cent year on year (YoY) in Q1 2026 from 2.6 per cent in the previous quarter. Investment in pension schemes recorded the strongest increase, rising to 5.5 per cent from 2.8 per cent, while life insurance investment grew 2.8 per cent and debt securities investment increased 3.5 per cent. Growth in currency and deposits eased to 2.9 per cent, and investment in shares and other equity remained broadly stable at 2.0 per cent.
Households were overall net buyers of debt securities, primarily government-issued securities, while remaining net sellers of listed shares issued by non-financial corporations. They increased purchases of shares issued by non-euro area residents and continued to invest in both money market and non-money market investment funds. Household financing growth also accelerated to 3.0 per cent, driven by loan growth of 3 per cent.
The household debt-to-income ratio remained broadly unchanged at 81.0 per cent in the first quarter of 2026, while the household debt-to-GDP ratio edged down to 50.3 per cent from 50.6 per cent a year earlier.
Financing of non-financial corporations increased at an unchanged annual rate of 1.4 per cent in Q1 2026. Debt securities issuance accelerated to 4.0 per cent, while loans from all creditors grew 2.3 per cent and trade credits and advances increased 4.2 per cent. Net issuance of shares and other equity remained unchanged at 0.7 per cent.
The consolidated debt-to-GDP ratio for NFCs declined to 65.6 per cent in the first quarter of 2026 from 67.1 per cent a year earlier, while the broader non-consolidated debt measure eased to 136.5 per cent from 137.9 per cent, indicating continued deleveraging in the corporate sector.
