Households’ financial assets fall for the second quarter in succession

Households’ financial assets fell by €98 billion in the second quarter of 2022 and thus for the second time in succession. At the end of the quarter they stood at €7,496 billion. This is the sharpest decline in more than two years. While households’ claims grew by €72 billion, this did not compensate for the significant valuation losses totalling €170 billion.

Valuation losses affected almost all asset classes on the market. Shares and other equity held by households lost €89 billion in value, investment fund shares €77 billion and debt securities €7 billion. Overall, valuation losses in the reporting quarter were subsequently up by €56 billion on the first quarter of 2022.

As a result of transactions, financial assets increased less than in those quarters marked by the coronavirus pandemic. Households acquired relatively few investment fund shares (€12 billion), but slightly more debt securities (€5 billion). Lately, inflows of €32 billion were recorded for currency and deposits and inflows of €22 billon for claims on insurance corporations.

Households’ liabilities continued to rise, reaching €2,090 billion at the end of the second quarter of 2022, an increase of €30 billion on the first quarter. However, in the context of still increasing economic output and higher disposable income, the debt ratio dipped again slightly to 55.8%. The debt ratio is calculated as total debt in relation to nominal gross domestic product (four-quarter moving sum).

Households’ net financial assets fell significantly by €127 billion as a result of valuation losses and amounted to €5,406 billion at the end of the second quarter of 2022.

External financing among non-financial corporations increases slightly

After falling significantly in the first quarter of 2022, external financing increased again slightly in the reporting quarter to stand at €82 billion. At €39 billion, borrowing was also somewhat higher than in the previous quarter. Shares and other equity were issued to the value of €8 billion, a little more than in the previous quarter, but much less than in the fourth quarter of 2021.

The external financing of non-financial corporations also accelerated in annual terms (four-quarter moving sums). This increase is largely attributable to a high level of borrowing. This development is partly related to the Federal Government’s new assistance loans for enterprises particularly affected by the energy crisis. Other accounts payable – consisting of trade credits and advances – also made a significant contribution to the growth in external financing.

The financial assets of non-financial corporations amounted to €6,097 billion at the end of the second quarter of 2022, which was €26 billion less than in the previous quarter. This is the first decline since the first quarter of 2020. Transactions pushed up financial assets by €36 billion. However, as with households, this was outweighed by discernible valuation losses, especially in the case of shares and other equity (€97 billion).

Similarly, shares and other equity issued by non-financial corporations suffered from ongoing negative developments on the stock exchanges, resulting in valuation losses of €405 billion. Overall, the liabilities of non-financial corporations fell again significantly and stood at €7,762 billion at the end of the quarter.

Overall, net financial assets grew to -€1,665 billion. The net acquisition of financial assets totalled -€46 billion. However, this decrease in net acquisition was more than compensated by the severe negative valuation losses on the liabilities side.

Despite the overall rise in debt, the debt ratio – calculated as the sum of loans, debt securities and pension provisions in relation to nominal gross domestic product (four-quarter moving sum) – fell to 79.8%.

Owing to interim data revisions of the financial accounts and national accounts, the figures contained in this press release are not directly comparable with those shown in earlier press releases.