The additional 16 billion euros deposited by Irish households last year was significantly higher than the 12 billion euros added to the highest special savings incentive accounts (SSIA) in 2006, according to new figures from the Central Statistics Office (CSO).
The figures were in the agency’s latest institutional sector accounts, which also show Irish household gross disposable income increased by â¬ 9.3 billion (8%) in 2020 due to ‘unprecedented restrictions on travel and other activities â.
The central bank has predicted accelerated growth of 15.3% this year due to a rapid pick-up in consumer spending linked to unwinding of excess savings accumulated during the pandemic.
Much of the SSIA money in the 2000s was used to pay housing deposits. Over the past decade, investments in new homes have been more modest, with households adding to their more liquid assets, the CSO said. “In 2020, due to the pandemic, the trend of deposits on home purchases accelerated rapidly,” he said.
The pandemic has seen an increase in the gross disposable income of Irish households, which rose to 9.3 billion euros in 2020, with restrictions limiting the amount people could spend.
“Bars have been closed, restaurants have been restricted to take-out only, and many hotels and shops have been closed or have had their activities reduced,” the agency said.
The main contributor to household income was âcompensation of employeesâ such as wages, salaries, benefits in kind and other labor costs. In 2020, that included around 3.8 billion euros of the government’s wage-to-employment subsidy program, which went to employers and then workers affected by the pandemic.
However, the CSO warned that the increase in disposable income was very unevenly distributed, with many workers, especially those in hospitality, retail and other sectors hit hard by the pandemic, experiencing a financial turnaround. .
Private sector debt fell in 2020 to â¬ 704.5 billion. This is explained by the decline in the debt of non-financial corporations, households and non-profit organizations.
At 189% of GDP (gross domestic product), the private sector debt-to-GDP ratio continued to exceed the threshold of 133% of GDP set under the EU’s macroeconomic imbalance procedure, which aims to identify risky debt levels.
The pandemic-related restrictions that resulted in greater savings for households also led to an 8% drop in Irish business profits, with travel and hospitality the hardest hit, according to the figures.
At the same time, foreign multinationals here, which are mainly in technology and pharmaceuticals, have seen their profits increase by 12 percent in their Irish operations.