Despite the economic uncertainty caused by the Covid-19 pandemic, private incomes in Germany have remained relatively stable. In fact, private wealth has reached a new record high. However, the perceived economic insecurity has led to the highest savings rate since reunification. According to data from the Bundesbank, private wealth in Germany reached a new record high of €6.63 trillion in the second quarter of 2020, despite the economic impact of the pandemic. This represents an increase of 4% compared to the first quarter of 2020 and 5.4% compared to the same period last year. The total wealth of private households in Germany, excluding all debts, is now €4.722 trillion, which is €236 billion higher than in the first quarter of 2020. The Bundesbank takes into account cash, securities, bank deposits, and claims on insurance, but not real estate assets.
Although the pandemic and uncertainty about its economic impact caused losses in stock valuations in the previous quarter, the Bundesbank reports that these losses were largely compensated for. Nevertheless, many savers are currently investing mainly in bank deposits, which currently yield little interest, or holding cash to quickly access a portion of their wealth if needed. As a result, cash and bank deposits increased the most in the second quarter of 2020, reaching €72 billion. A study by DZ Bank also shows that the savings rate has increased significantly during the Covid-19 pandemic. Economists, such as Michael Stappel, expect a savings rate of up to 16% by the end of the year, compared to 10.9% in 2019. According to data from the Federal Statistical Office (Destatis), this is the highest savings rate since reunification.
Despite the pandemic, the available incomes of private households in Germany have remained relatively stable, according to data from renowned economic research institutes. Economists attribute this to the government’s good response and numerous stimulus programs. However, they note that these are only average values and do not apply to all households due to income inequality.
