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| Euro area economic and financial developments by institucional sector fourth quarter 2010 |
| ECB, 03.05.2011 |
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| In the fourth quarter of 2010, the annual growth rate1 of net disposable income in the euro area
remained broadly unchanged at 3.1%, compared with 3.0% in the third quarter of 2010 (see Annex,
Table 1). The annual growth rate of final consumption in the euro area decreased to 2.5% in the fourth
quarter (2010q3: 2.7%). Gross fixed capital formation increased by 2.8% in the fourth quarter of 2010,
compared with 2.1% in the previous quarter.
The annual growth rate of households’ gross disposable income was broadly unchanged at 1.8% in the
fourth quarter of 2010, after 1.9% in the previous quarter (see Table 2). The annual growth rate of
households’ consumption expenditure was 3.3% in the fourth quarter compared with 3.2% in the
previous quarter. The annual growth rate of households’ gross saving was -7.0% in the fourth quarter
compared with -7.8% previously. The households’ gross saving rate2 stood at 13.8%, compared with 15.2% in
the fourth quarter of 2009. The annual growth rate of financing of households remained broadly unchanged
at 2.8% in the fourth quarter of 2010 (2010q3: 2.9%), and the annual growth rate of their financial
investment was 2.7% in the fourth quarter of 2010, compared with 2.8% in the previous quarter.
Households’ net worth3 increased by 4.0% in the fourth quarter, compared with 3.8% in the previous
quarter (see Chart 6).
The annual growth rate of gross fixed capital formation of non-financial corporations in the euro
area increased to 6.3% in the fourth quarter of 2010, from 4.0% in the previous quarter (see Table 3). The
annual growth rate of net entrepreneurial income of non-financial corporations was 12.8% in the fourth
quarter, after 8.3% in the previous quarter. The annual growth rate of financing of non-financial
corporations was 2.4% in the fourth quarter, compared with 2.3% the previous quarter, and the annual
1 The euro area accounts are expressed in current prices and they are not seasonally adjusted. The (nominal)
growth rates are presented as year-on-year changes. (see the notes).
2 The households’ saving rate is based on four-quarter cumulated sums of both their saving and their gross
disposable income (adjusted for the change in net equity of households in pension fund reserves, receivable
minus payable).
3 Households’ non-financial assets mainly consist of housing wealth (residential structures and land). In addition,
they also include non-financial assets of unincorporated enterprises classified within the household sector.
2
growth rate of their financial investment remained broadly unchanged at 3.8% in the fourth quarter of
2010 (2010Q3 :3.9%).
Total euro area economy
The annual growth rate of euro area net disposable income remained broadly unchanged at 3.1% in
the fourth quarter of 2010 (2010q3: 3.0%) (see Chart 1). Euro area gross fixed capital formation
increased by 2.8% annually (2010q3: 2.1%), due to higher growth by corporations and households
(see Chart 2). The growth rate of gross capital formation4 decreased slightly to 5.7% in the fourth
quarter (2010q3: 5.9%) (see Chart 3).
Investment growth and the growth of gross saving were broadly unchanged in the fourth quarter of
2010 from the previous quarter. An increase in the growth of government gross saving was largely
compensated by the continued decline in households’ gross saving as well as a drop in the annual
growth of foreign savings (see Chart 3).
Households
The annual growth rate of households’ gross disposable income remained broadly unchanged at
1.8% in the fourth quarter of 2010 (after 1.9% previously). The slight decrease occurred despite an
increase in the growth rate of compensation of employees, and was partly due to increasing tax
payments and declining net social transfers (see Chart 4).
The annual growth rate of households’ consumption expenditure (3.3%) exceeded the annual
growth rate of households’ gross disposable income which implied a continued decline in gross saving
(-7.0% after -7.8% previously). The annual rate of change of gross fixed capital formation of
households increased to 3.1% in the fourth quarter, compared with 0.8% in the previous quarter. The
four-quarter moving average households’ gross saving rate was 13.8% (compared with 15.2% in the
fourth quarter of 2009).
The annual growth rate of financing of households remained broadly unchanged at 2.8% in the
fourth quarter of 2010 (2010q3: 2.9%). The annual growth rate of households’ gross non-financial
investment was 3.4%, up from 1.9% in the previous quarter (see Chart 5) whilst that of financial
investment was 2.7% compared with 2.8% previously.
4 This also includes changes in inventories and net acquisitions of non-produced, non-financial assets.
3
Turning to the components of households' financial investment, the annual growth rate of their
holdings of currency and deposits remained unchanged at 2.8% in the fourth quarter of 2010
(2010q3: 2.8%). The annual growth rate of their investment in debt securities was -1.6% in the fourth
quarter (2010q3: -2.3%), while the investment in shares and other equity was 0.7% in the fourth
quarter (2010q3: 0.8%). The annual growth rate of households’ additions to life insurance and
pension fund reserves decreased to 4.6% in the fourth quarter (2010q3: 4.9%).
Developments in households’ balance sheets were dominated by valuation changes of their nonfinancial
assets. Growth of households’ net worth was 4.0% in the fourth quarter of 2010 (2010q3:
3.8%, see Chart 6). The annual growth rate of housing wealth was 4.0% (2010q3: 3.7%), whereas
the growth rate of the market value of households’ holdings of shares and other equity was 4.9% in
the fourth quarter of 2010 (2010q3: 2.0%, see Table 2).
Non-financial corporations
The annual growth rate of net entrepreneurial income of non-financial corporations5 was 12.8%
in the fourth quarter of 2010, up from 8.3% in the previous quarter (see Table 3). The annual growth
rate of net value added was 4.3% (2010q3: 3.5%, see Chart 7 and Table 3). Gross fixed capital
formation of non-financial corporations increased with an annual growth rate of 6.3% in the fourth
quarter of 2010, after 4.0% in the previous quarter. The annual growth rate of total gross nonfinancial
investment, which also includes inventories, was 13.2%, up from 11.1% in the previous
quarter (see Chart 8).
In the fourth quarter of 2010, the annual growth rate of financing of non-financial corporations
remained broadly unchanged at 2.4% (2010q3: 2.3%). The growth rate of their loan financing
amounted to 2.0%, down from 2.2% in the previous quarter. The annual growth rate of their issuance
of debt securities was 7.7% (2010q3: 8.6%). The annual growth rate of their equity financing, via the
issuance of quoted and unquoted shares and other equity, increased to 2.0% (2010q3: 1.7%).
Financial investment of non-financial corporations increased at an annual rate of 3.8% in the
fourth quarter (2010q3: 3.9%). The annual growth rate of investment in currency and deposits
increased to 3.0%, after 2.5% previously. The growth rate of loans granted decreased to 9.2% in the
fourth quarter of 2010 (2010q3: 9.5%). The growth rate of their investment in shares and other
equity increased to 2.2% (2010q3: 1.2%).
Insurance corporations and pension funds
The annual growth rate of insurance technical reserves, the major financing instrument of
insurance corporations and pension funds, decreased to 4.4% in the fourth quarter of 2010,
compared to 5.0% in the third quarter (see Table 6). The annual growth rate of their financial
5 Net entrepreneurial income is broadly equivalent to current profits in business accounting (after the receipt
and payment of interest and including the profits of foreign subsidiaries, but before the payment of income
taxes and dividends).
4
investment decreased to 3.5% from 4.3% in the previous quarter. The growth rate of their
investment in debt securities remained broadly unchanged at 6.2% (2010q3: 6.1%), whilst that of their
investment in shares and other equity decreased to 2.0%, from 4.7% in the previous quarter.
Notes
The annual growth rate of non-financial transactions and of outstanding financial assets and liabilities
(stocks) is calculated as the percentage change between the value of the transaction or outstanding amount for a
given quarter and that value recorded four quarters earlier. Let t x be the level of a non-financial transaction or endof-
quarter stock, then its annual percentage change ( ) t g x is calculated as:
( ) *100
4
4
t
t t
t x
g x x x .
The annual growth rate used to analyse financial transactions refers to the total value of transactions during
the year in relation to the outstanding stock a year before. These growth rates for financial transactions exclude the
effect on the outstanding stock of revaluations, reclassifications, and further changes that do not arise from
transactions. When t f represents the value of transactions in a particular financial instrument, and t F represents
the value of the corresponding stock outstanding at the end of quarter t, then the annual growth rate g( t f ) is
calculated as the sum of the transactions during the year divided by the outstanding stock a year ago:
( ) * 100
4
3
0
t
i
t i
t F
f
g f
The euro area accounts encompass integrated non-financial and financial accounts, including financial balance sheets.
They are jointly compiled by the ECB and the European Commission (Eurostat), in close cooperation with the
national central banks and the national statistical institutes in the EU.6 The European sector accounts follow the
methodology of the European System of Accounts 1995 (ESA 95).7 A detailed set of quarterly data is published in
Tables 3.1 - 3.5, “Euro area accounts”, of the statistics section of the ECB’s Monthly Bulletin.
This press release incorporates revisions for the third quarter of 2010 and for previous quarters.
A comprehensive set of tables is made available at http://www.ecb.eu/stats/acc/html/index.en.html (ECB). The time
series for the euro area accounts can be downloaded from the ECB’s Statistical Data Warehouse.
The publication of euro area economic and financial developments in the first quarter of 2011 is scheduled to take
place on Friday, 29 July 2011 at 10 a.m. CET.
6 See http://ec.europa.eu/eurostat/sectoraccounts (Eurostat) for the non-financial accounts of the EU.
7 For more details, see http://forum.europa.eu.int/irc/dsis/nfaccount/info/data/esa95/en/titelen.htm.
European Central Bank
Directorate Communications, Press and Information Division
3.05.2011 |
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Address : Euro-Brew Ltd., Hlboká 22, 917 01 Trnava, Slovakia
Tel. : +421 33 53 418 53, Fax : +421 33 53 418 52, E-mail : info@eurobrew.sk |
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