Dáil Éireann Debate, Thursday - 4 July 2024
117. Deputy Richard Bruton asked the Minister for Finance if he has considered any innovative policy measures to mobilise the sustained higher levels of saving among Irish consumers post-Covid; and if he will make a statement on the matter. [28639/24]
View answerI am pleased to report that Irish households are, on aggregate, in a strong financial position. Irish household deposits increased substantially during the Covid-19 pandemic, as public health restrictions limited expenditure whilst government supports helped maintain the link between employers and employees and protected household incomes. At the height of pandemic, the saving rate, the share of household income that is not used for consumer spending, peaked at 32 per cent. While the household savings rate has since returned to more normal levels it remains above the pre-pandemic level.
Throughout the period of elevated inflation, the Government’s packages of cost of living supports have helped safeguard households from the corrosive effects of inflation. When adjusted for inflation aggregate household disposable incomes increased by 3 per cent between 2021 and 2023. These supports also protected household balance sheets. Indeed, households continue to hold around €154.4 billion in deposit accounts as of April 2024, an increase of 44 per cent compared to the same period in 2019. These savings could be used to boost economic activity through investment or consumption into the future through the financial intermediation system
Looking ahead, household balance sheets are expected to remain in a strong position reflecting the strength of the labour market alongside the significant easing in inflation pressure. Any further policy measures in this space will form part of the normal budgetary process. In this regard, I will set out the broad parameters for the upcoming Budget in the Summer Economic Statement this month.
