Euro area economic and financial developments by institutional sector: second quarter of 2023

  • As of October 2023, ECB quarterly financial accounts provide breakdown of life insurance and pension entitlements by investment risk
  • Euro area net saving increased to €669 billion in four quarters to second quarter of 2023, compared with €640 billion one quarter earlier
  • Household debt-to-income ratio decreased to 89.4% in second quarter of 2023 from 95.0% one year earlier
  • Non-financial corporations' debt-to-GDP ratio (consolidated measure) decreased to 68.8% in second quarter of 2023 from 73.4% one year earlier

Life insurance and pension entitlements by investment risk

As of October 2023, the quarterly financial accounts published by the European Central Bank (ECB) provide a breakdown of life insurance and annuity entitlements as well as pension entitlements by investment risk.

In the case of unit-linked life insurance and defined contribution pensions, the investment risk is borne by households. This means that the value of households’ entitlements depends on the investment returns of the premiums and contributions invested on their behalf.

1. In the case of non-unit linked life insurance and defined benefit pensions, the benefits are largely specified in nominal terms. The investment risk is primarily borne by the insurance
corporation, and the pension fund or employer (or other pension sponsor).

In the euro area, more than 75% of life insurance and pension entitlements consist of non-unit linked life insurance and defined benefit pensions (see Chart 1). For more details see: life insurance and pension entitlement by investment risk explained life insurance and pension entitlement by investment risk explained.

Total euro area economy

Euro area net saving increased to €669 billion (6.1% of euro area net disposable income) in the four quarters to the second quarter of 2023, as compared with €640 billion in the four-quarter period ending in the first quarter. Euro area net non-financial investment increased to €628 billion (5.7% of net disposable income), due to higher net investment by non-financial corporations more than offsetting a decrease by households, while net investment by financial corporations and general government were
broadly unchanged (see Chart 2 and Table 1 in the Annex).

Euro area net lending to the rest of the world decreased to €87 billion (from €103 billion in the previous quarter), reflecting net non-financial investment increasing more than net saving. Net lending of nonfinancial corporations declined to €171 billion (1.5% of net disposable income) from €221 billion, while that of financial corporations grew to €97 billion (0.9% of net disposable income) from €79 billion. Net lending by households increased to €355 billion (3.2% of net disposable income) from €310 billion.
The growth in net lending by the total private sector was more than offset by an increase in net borrowing by the general government (-4.9% of net disposable income, after -4.7% previously).


Household financial investment increased at an annual rate of 2.1% in the second quarter of 2023, down from 2.3% in the previous quarter. This deceleration was mainly due to lower growth rates of currency and deposits as well as shares and other equity, while net purchases of debt securities further strongly accelerated.

In the four quarters to the second quarter of 2023, households were net buyers of debt securities issued by all sectors, with net purchases increasing particularly strongly for debt securities issued by general government and MFIs. Households were net buyers of listed shares, although at a lower rate.
This deceleration was mainly due to lower net purchases of listed shares issued by non-financial corporations (see Table 1 below and Table 2.2. in the Annex).

The household debt-to-income ratio1 decreased to 89.4% in the second quarter of 2023 from 95.0% in the second quarter of 2022. The household debt-to-GDP ratio declined to 55.1% in the second quarter of 2023 from 58.1% in the second quarter of 2022 (see Chart 3).

Non-financial corporations

Financing of non-financial corporations increased at an annual rate of 0.8%, after 1.3% in the previous quarter. This resulted from a deceleration in financing by loans, in particular from MFIs and from within the non-financial corporation sector, as well as in financing by shares and other equity, and trade credits, while the financing by debt securities accelerated somewhat (see Table 2 below and Table 3.2 in the Annex).

Non-financial corporations' debt-to-GDP ratio (consolidated measure) decreased to 68.8% in the second quarter of 2023, from 73.4% second quarter of 2022; the non-consolidated, wider debt measure declined to 127.8% from 135.6% (see Chart 3).

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