Euro area economic and financial developments by institutional sector: fourth quarter of 2024

Total euro area economy

Euro area net saving was broadly unchanged at €838 billion (6.9% of euro area net disposable income) in 2024  compared with the four quarter period ending on the third quarter of 2024. Euro area net non-financial investment decreased to €434 billion (3.6% of net disposable income), due to decreased investment by households and non financial corporations which more than offset increased net investments by financial corporations and general government (see Chart 1).

Euro area net lending to the rest of the world was broadly unchanged at €431 billion reflecting the broadly = unchanged net saving and the decrease in net non-financial investment being broadly matched by a decrease in net capital transfers. Net lending of non-financial corporations decreased to €173 billion (1.4% of net disposable income) from €202 billion while that of financial corporations was unchanged at €147 (1.2% of net disposable income). Net lending by households increased to €579 billion (4.8% of net disposable income) from €574 billion. Net borrowing by general government decreased, contributing less negatively to euro area net lending (-€469 billion or -3.9% of net

Data for euro area saving, investment and net lending to the rest of the world (Chart 1)

Financial transactions can be presented with a counterpart sector breakdown for deposits, loans, debt securities, listed shares and investment fund shares (see Table 1). In 2024 the largest aggregated transactions in these financial instruments were interbank operations as other MFIs1 reduced deposits with the Eurosystem (-€556 billion) while increasing investments with the rest of the world (€513 billion). Financial investment of households involved to a large extent transactions vis-à-vis other MFIs (€361 billion), mostly in the form of deposits, as well as net purchases of investment fund shares (€150 billion). Non-financial corporations’ largest financing component was from within the NFC sector (€117 billion), mostly in the form of loans and often reflecting intra-group transactions, while financing from other MFIs amounted to €102 billion. The financing of general government from the rest of the world, mostly in the form of debt securities, increased (€404 billion).