The world’s consumers stockpiled an extra $5.4 trillion (€4.5 trillion) of savings since the COVID pandemic began, setting the stage for a strong rebound in consumer spending as businesses reopen, according to Moody’s credit rating agency.
Reflecting an equally dramatic decrease in consumer spending, this figure, defined as additional savings compared with spending data for 2019, equates to more than six per cent of global GDP.
According to Mark Zandi, chief economist at Moody’s analytical arm, this could see a market boom as “significant pent-up demand” is released in tandem with “overflowing excess saving”.
If consumers spent about a third of their excess savings they would boost global output by over two per cent in 2020 and 2021, he predicts.
More locally, data provided by the European Union’s statistics agency Eurostat has shown that when nations in the EU were released from COVID lockdowns at the end of the second quarter, consumer spending erupted.
Notably, the data indicates that the decline in household spending far outstripped a decline in household income over Q2. Similarly, in Q3, increases in spending were dramatically higher than increases in income.
During the third quarter, savings rates in the EU decreased by 7.3 per cent, as consumption per capita increased by 11.4 per cent.
The UK Government is considering rolling out more advanced scanners by mid-2024, sources told the BBC
The UK is the only G7 nation whose economy is still smaller than it was before the pandemic