New figures from the Central Statistics Office show that the Households Saving Rate fell to 14% in the first three months of 2023, down from 24% at the end of 2022.
The CSO said the lower rate of saving in the first three months of the year marked a departure from the high rate that had prevailed since the Covid pandemic arrived.
The 14% saving rate is similar to that in the last three months of 2019, it noted.
The CSO said that most of the savings went into bank deposits and to buying or improving homes.
The figures show that saving declined in the first quarter as consumption grew while disposable income shrank.
Consumption rose in the first quarter of 2023 largely due to higher prices, but also due to higher volumes of goods and services being bought.
Peter Culhane, Statistician in the National Accounts Analysis & Globalisation Division at the CSO, said we are seeing a return to a more typical ratio of saving to spending for Irish households this year.
“The rate of saving over 20% that prevailed since the Covid-19 pandemic arrived was highly unusual. The 14% rate this quarter is similar to the profile of spending and saving in 2019,” he added.
The CSO said that household incomes are still higher than consumption, and households are still adding to their considerable deposits, but they are just adding at a slower rate.
Households saved €6.4 billion in the last quarter of 2022, before adjusting for seasonality or inflation.
The CSO said that while the first quarter of 2023 shows a sharp decline in the saving rate, households – taken collectively – are in a strong economic position.
Household deposits with Irish banks stood at €151 billion at the end of March, compared to €110 billion at the end of 2019 and €83 billion at the end of 2007.
Households have €100 billion in loans with Irish credit institutions, compared to €87 billion at the end of 2019 and €153 billion at the end of 2007.