Germans have grown richer with the pandemic … Households’ financial assets rose to 7.1 trillion euros


The accounts of the German central cooperative bank DZ Bank showed that citizens in Germany saved heavily during 2020, and thus became wealthier than ever before, according to Al-Germania.
According to estimates, it is likely that the financial assets of families increased by 393 billion euros (477 billion dollars) to reach a record value of 7.1 trillion euros in 2020. Michael Stubbel, an economist at the bank, attributed the growth in financial assets, which amounted to 5.9 percent. Percent, compared to the previous year, largely due to an unprecedented high savings rate.
Many people saved their money out of concern about part-time work or unemployment. The temporary closure in the retail sector has also limited consumption, and the bank expects that the savings rate has reached a record high of 16 percent in 2020, while the National Association of German Cooperative Banks predicts BVR early last month that the rate is 17 per cent.
By calculations, families in Germany saved 16 or 17 euros out of every hundred euros of disposable income throughout the year. According to the data of the Federal Statistical Office, the highest savings rates in Germany were measured so far in 1991 and 1992 at 12.9 percent, in both, and in 2019, the savings rate was 10.9 percent.
While stock markets recovered relatively quickly in 2020 from the meltdown caused by the Corona pandemic in February and March, gains in the value of stocks and mutual funds contributed only a small part to the growth of private financial assets. “ Ultimately, the growth in financial assets in 2020 was almost entirely due to extremely high savings as a result of the coronavirus crisis,” Staple said.
In addition, an economist expected that there will be somewhat less pressure on real estate prices in Germany in the new year, after the continuous real estate boom even during the Corona virus pandemic.
“The housing market in Germany is surprisingly strong,” said Stefan Mitropoulos, an economist and real estate expert at Landsbank Hesse-Turingen “ Helapa”. “The housing market in Germany is surprisingly strong, and no price drop is expected.”
He said, “ It is possible that the pandemic will limit the rise in prices, because instead of increases of between 5 and 6 per cent annually, the prices of apartments and houses could increase by about 4 per cent in 2021. Many experts had expected that the pandemic would lead to an end. The real estate boom that Germany witnessed for several years, but prices continued to rise, despite the decline in economic conditions with millions of workers working for short periods and increasing unemployment. In the third quarter, real estate prices increased by 7.8 per cent, compared to the same period last year, According to the Federal Statistical Office.
In addition, Marcel Fratzscher, head of the German DIW Institute for Economic Research, expected dire consequences for the German economy if the lockdown related to the Corona pandemic was extended.
“The longer it takes, the more companies reach the limits of their capabilities, and the more companies declare bankruptcy,” Fratscher said in statements to the German newspaper, Augsburger Allmann.
Fratscher stated that the second wave of bankruptcy will be more difficult than expected. “The question now is not whether there has been a wave of corporate bankruptcies, but when,” noting that this also threatens to increase unemployment.
Nevertheless, Fratscher stressed that it is better to extend the closure if the number of infections continues to increase, and said, “easing restrictions on the economy now may benefit some in the short term, but it will harm everyone in the long term.”
Frachscher pointed out that the labor market has gone through the crisis in a poorer way than the statistics show, explaining that nearly 600,000 employees covered by Social Security lost their jobs in 2020.
He added, “There are also about 850,000 employees of low-income professions who did not appear in any of the unemployment statistics and do not have the right to unemployment benefits or part-time work benefits,” noting that a large number of self-employed persons, whose total number is about Two and a half million, incurred huge losses.
The Federal Association of Free Professions in Germany warned yesterday that there are about 140,000 jobs in the sector threatening to be canceled due to the Corona crisis. “The crisis affected it to the heart,” said Wolfgang Ever, president of the association.
This came according to an opinion poll conducted among the self-employed and its results showed that 20.3 percent of this group described their current job situation as bad, and 14.2 percent of the self-employed said, “They expect the number of their workers to decline during the next two years.”
“The results of the survey showed that the outcome of the crisis year was bitter for four out of ten people with self-employment, as the situation worsened compared to 2019, according to Al-Germania.” And 25.3 percent of them said that the economic damage resulting from the crisis has become Threatening their existence, “while 13.8 percent expressed their fear of a repeat of this scenario in 2021.


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