2020 was a year of crisis, but for many Portuguese families it was also a year to spare. Bank deposits and savings and treasury certificates reached maximum values. In total, families have more than 188 billion euros held in banks, deposits or state certificates.
In the case of bank deposits, the Portuguese reserved more than 8 billion euros in 2020 and had, at the end of October, 158.6 billion euros in the bank. In terms of state certificates, household savings amounted to 29.7 billion euros, the largest ever. In November alone, families invested 108 million euros in treasury certificates and 11 million euros in savings certificates, according to the Bank of Portugal.
The trend is visible in the improvement of the savings rate which has increased this year. At the end of September, it represented 10.8% of disposable income, according to data from the National Institute of Statistics, against 7.2% in 2019.
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“A recently published European Central Bank study shows that savings are increasing across Europe and that, unlike what usually happens in times of crisis, the main explanation for the increase in savings is not the fear of the future, but the fact that families have unwittingly cut their spending because they have been prevented from following their usual pattern of consumption, ”said Filipe Garcia, economist at IMF-Financial Market Information.
“In Portugal, the effect of the credit default should also be highlighted. By not paying the down payments, families kept this money in their account, increasing the overall volume of deposits, ”he explained.
But the economist recalls that the current crisis, caused by the measures adopted in the context of the pandemic, has affected “families asymmetrically, with many cases of loss of jobs and income in which it can be offensive to talk about savings ”.
“It is likely that the trend will change when the pandemic normalizes and the moratoriums end, but it is still very uncertain when this will happen as the situation changes every day,” said Filipe Garcia. “So there is a part of this economy that is not really voluntary. It is true that this implies a reduction in the consumption of certain goods and services, but the decision was not arbitrary, ”he reiterated.
For António Ribeiro, economist at Deco Proteste, the tendency of families to opt for savings in deposits and government bonds “poses several dangers”. “This year, inflation is negative and therefore the income that exists is real income, but next year we expect inflation to rise,” he warned. “Families need to invest in assets with income above inflation so that they can get positive real income,” he said. Banco de Portugal forecasts a positive inflation rate of 0.3% in 2021 and 0.9% in 2022. In 2020, it estimates a negative inflation rate of 0.2%. “In the long term, the economy loses its real value,” he warned.
With most banks offering zero or close to zero interest rates on deposits, António Ribeiro advises re-evaluating the amounts invested in deposits in 2021. Treasury and savings certificates “are a more attractive option”, especially for five-year investments. If they have a financial margin, “families should share savings with guaranteed capital and without guaranteed capital,” he said. One of the options may be to invest in mixed funds, with stocks and bonds. “Families should always have two types of savings: the emergency fund on deposits and savings or treasury bills and long-term savings, more focused on reform,” he said. declared. Here they can opt for investment funds or solutions such as retirement savings plans, pension funds or retirement certificates, which have the advantage of having tax advantages, ”he said. -He underlines.
But António Ribeiro said: “It is likely that we still have an economic crisis” with the end of measures adopted in the pandemic, such as moratoria. And he recalled that this crisis, if it occurs, can still be reflected in the financial markets. Therefore, it recommends caution to families when investing.
Elisabete Tavares is a cash journalist