Taps Coogan – June 3rd, 2022

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The following chart, from Barkow Consulting via Holger Zschaepitz, shows that the growth rate in German savings deposits has dropped from its highest level since at least 2004 to the lowest level since the Global Financial Crisis.

To a certain extent, this was inevitable. Savings rates went through the roof around the world during Covid as consumers were forced to cut back on all sorts of spending categories while being showered with various stimulus programs. Now, with consumer spending habits getting back to normal and high energy costs and inflation eating into budgets, savings rates are plunging. It’s not the end of the world, but if it does not bottom out soon, it portends a consumer recession.

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