According to a study by DZ BANK Research, the financial assets of private households in Germany increased by two percent to almost EUR 8 trillion in 2022. In the previous year, financial assets increased by eight and a half percent. According to Michael Stappel, Head of Macroeconomics and author of the study, the lower growth is due in particular to the mixed year for equities. "By the middle of the year, substantial price losses in stocks and funds had actually led to a decline in financial assets. In the second half of the year, the losses were at least partially made up. The decisive contribution to growth, however, came from high savings," says Stappel.

Despite rising prices: Savings rate higher than before the pandemic
Even though high inflation is making it increasingly difficult for many households to put money aside, the current uncertainty is causing Germans to become more cautious with purchases. "Precaution is the traditional crisis response of private households. For the moment, many citizens put the purchase of furniture or a new car far down on their list of priorities. The savings rate is therefore expected to be 11 percent in 2022, above the level of 2019," explains Michael Stappel. However, the current savings level is a far cry from the historic record of 16.4 percent set in the first Corona year of 2020.

Interest rate turnaround not yet helping to build wealth
Despite the sharp rise in interest rates this year, the average real interest rate on fixed-income financial assets such as deposits, bonds and insurance policies is likely to be minus 7.3 percent due to the historical rate of inflation. "Very high inflation is a problem not only for real income growth but also for wealth accumulation. Due to the loss of purchasing power of financial assets, households regularly have to put a larger portion of their income to one side in order to achieve their savings goals at all," Stappel stresses.  

Economist Michael Stappel

Outlook: Financial assets likely to grow more strongly again in 2023
Michael Stappel takes a positive view of the fact that many Germans remained loyal to the stock exchange despite the price losses and even used the setbacks to buy additional shares. "With the economic recovery starting next spring, share prices should also tend to rise further. Equities remain essential for wealth accumulation," he says. In addition, he expects inflation to gradually decline and interest rates to continue to rise overall. Nevertheless, the share of cash and demand deposits remains too high at almost 30 percent of total financial assets. "As before, we see an investment backlog. German citizens should also be more active in looking after their savings on account of pension provision. In the future, certain bonds are likely to be interesting again in addition to equities," Michael Stappel adds.