Finances - Bundesbank: German wealth continues to increase
Private households in Germany increased their Money assets in the first quarter of this year. The total amount reached 7.95 trillion Euro, an increase of 216 billion Euro compared to the previous quarter, according to the Bundesbank.
This growth was due in part to stock market gains on held stocks and investment funds, which were worth 129 billion Euro more at the end of March than at the beginning of the year. Insurance and pension claims also gained 19 billion Euro in value. Additionally, households put more money into higher-yielding savings accounts with longer maturities.
Money in cash and negative yielding deposits
However, the largest portion of money assets (41%) still remains in cash and deposits such as checking and savings accounts. The interest earned on these deposits remains below inflation, resulting in a negative yield for this investment form that gradually erodes the wealth.
Unequal distribution of wealth
However, there are also debts against this wealth, which amounted to 2.16 trillion Euro at the end of the quarter. These debts grew little, as few housing construction loans were granted, according to the Bundesbank. Therefore, the net financial assets of the population in Germany increased by 214 billion Euro to 5.79 trillion Euro. This gigantic sum, according to the report, is very unequally distributed: 10% of households control over 70% of the net financial assets.
The Bundesbank considers cash, bank deposits, securities such as stocks and funds, and claims against insurers in its evaluation. Real estate is not considered.
Bundesbank statement Money assets Q1/2024
- The total sum of money assets held by German consumers reached an impressive 7.95 trillion Euro in Q1 of 2024, a significant increase of 216 billion Euro compared to the previous quarter, as reported by the Federal Bank in Frankfurt am Main.
- A large portion of this monetary wealth, around 41%, is still held in cash and negative yielding deposits at Federal Bank institutions like Federal Bank and numerous savings accounts, despite the erosion of wealth due to negative yields.
- The German Federal Bank, in its Q1/2024 statement, highlighted that the unequal distribution of wealth continues, with just 10% of households controlling over 70% of the net financial assets in Germany.
- Consumers in Germany increased their finances through various means in Q1 of 2024, such as stock market gains, inflation-adjusted insurance and pension claims, and higher-yielding savings account investments, as outlined in the Bundesbank report.
