Lower savings in the household sector

PiggyBankSeasonally adjusted figures for the 1st quarter of 2010 show that savings in the household sector are lower than the previous quarter. In addition, disposable real income for the household sector declined by 1.6 per cent compared with the 4th quarter.

The growth in seasonally adjusted disposable income in current prices was 0.5 per cent in the 1st quarter of 2010. Behind this moderate growth lies an increase in compensation of employees, which is the main income component for the households, of 0.8 per cent. Also, pensions and benefits from central government saw a modest increase of 1.3 per cent, while property income declined and reduced disposable income. Disposable real income, which is disposable income adjusted for price increase, fell by 1.6 per cent and amounted to 5.9 per cent.

Growth in household consumption resulted in lower savings

Seasonally adjusted figures for consumption show a growth rate of 3.1 per cent for the 1st quarter of 2010. This development is influenced by the rise in prices and particularly growth in electricity prices. Together with the modest increase in disposable income, and the rise in consumption, savings were reduced by NOK 7 billion in the 1st quarter of 2010.

Lower saving rate

The seasonally adjusted saving ratio, savings share of disposable income, was 5.9 per cent in the 1st quarter of 2010, while the saving ratio for the previous quarter was 8.5 per cent. The unadjusted saving ratio is almost 10 per cent for the 1st quarter of 2010.

Source: Statistics Norway

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