Cyprus sees drop in savings to 6.5%, Eurostat highlights

People in Cyprus saved only 6.5% on average of their disposable income in 2022 (compared to 12.7% on average in the EU), according to non-financial sector accounts annual data published by Eurostat.

Saving rates were significantly lower than in 2021 (13.47 in Cyprus, 16.4% in the EU), and closer to the values before COVID-19 pandemic (5.8% in Cyprus and 12.3% in the EU in 2019).

The highest gross saving rates among the EU members in 2022 were recorded in Germany (19.9%), the Netherlands (19.4%) and Luxembourg (18.1%).

Cyprus was one of 12 EU members that recorded saving rates below 10.0% in 2022, among which Poland and Greece had negative rates, -0.8% and -4.0%, respectively. These negative rates indicate that households spent more than their gross household disposable income and were therefore either using accumulated savings, or were borrowing.

In 2022, real gross household adjusted disposable income per inhabitant in the EU recorded a decrease of 0.8%, while the euro area experienced a 0.9% drop, the first declines since 2013.

In Cyprus, this rate showed a small increase of 0.04% according to provisional data, as opposed to previous year when it was recording significant increases (7.9% in 2019, 1.9% in 2020 and 7.0% in 2021). These increases began in 2015, after two years of decreases in 2013 and 2014 (-3.8% and -5.5 respectively).

Looking at the developments over the past two decades, after the negative rates between 2010 and 2013 due to the global financial and economic crisis, real gross household adjusted disposable income per inhabitant was increasing from 2014 to 2021.

In 2020, during the initial year of the COVID-19 crisis, the rate of change decelerated but remained positive. After a record 2.8% growth in 2021 – the highest in the past two decades – in 2022 the increase in nominal value (+6.3%) was lower than the increase of prices (+7.2%), and thus a decrease in real value was observed.