Economic Memos provide insight into the analysis work being performed by Danmarks Nationalbank’s employees. For example, Economic Memos contain background analyses and method descriptions. Economic Memos are primarily targeted at people who already have a knowledge of economic and financial analyses.
The Danish savings surplus: Trends in firm and household savings
Over the past 30 years, Denmark has had a savings surplus in the sense that gross savings have exceeded gross investments. This is equivalent to a current account surplus, and it has been particularly evident since the global financial crisis in 2008. The savings surplus has to a large extent been accounted for by firms. While the level of investment of non-financial firms is comparable to other countries, their earnings and gross savings are high by international comparison. For households, healthy pension contributions have to some extent been offset by borrowing, but their financial wealth has been increasing due to valuation gains on financial assets.
Key messages
Why is this important?
Since the global financial crisis in 2008/09, Denmark has been characterised by a substantial savings surplus in the sense that savings have exceeded investments. This memo investigates the underlying trends in savings and investments for firms and households. Savings and investments are important macroeconomic fundamentals, and having a firm grasp of their trends is a prerequisite for understanding their drivers and for discussing associated policy questions.
Main chart
Strong savings surplus by firms since 1995 – households consolidated following global financial crisis
Note:
The chart shows the contribution of individual sectors to the aggregate savings surplus. Some holding companies are closely associated with the non-financial corporations that they own. This suggests that part of the savings surplus by holding companies can in some sense be attributed to non-financial corporations.
Source:
Statistics Denmark.