Overview

ING Economics noted in a Friday‑dated note that Eurozone households continued to save a larger share of their income than before the pandemic during the first quarter of 2026, thereby restraining consumer spending and overall economic growth.

Consumer Spending and Savings Ratio

Consumers in Europe spent €85.74 on goods and services for every €100 of disposable income in Q1 2026, a marginal increase from €85.70 in the fourth quarter of the previous year. The gross savings ratio – the proportion of disposable income not spent – stood at 14.26%, remaining well above the pre‑pandemic average of 12.5% that had been stable for the five years before the pandemic. By contrast, the United States recorded a gross savings ratio of 10.2% in Q4 2025, having moved back toward pre‑pandemic levels.

Impact on GDP

ING highlighted that household consumption typically accounts for just over 50% of European gross domestic product. A reduction of the savings ratio from the Q1 2026 level to the pre‑pandemic 12.5% would generate additional demand for goods and services equivalent to roughly 1% of GDP, while a decline to the United States‑level savings ratio would imply about 2% of GDP in extra demand.

Potential Offsets and Savings Allocation

The note added that if lower household consumption or higher savings were to translate into significantly higher household capital formation—such as increased new residential investment and renovations—this could offset the drag on domestic demand. Moreover, ING observed that Eurozone households are still saving heavily, but a growing share of those savings is now being allocated to investment products rather than traditional bank deposits, a shift that may lay the groundwork for stronger consumption and domestic demand in the coming years.

Comparative Perspective

ING contrasted the European situation with the United States, stating that household consumption continues to provide relatively strong support to the U.S. economy amid solid demand for goods and services, whereas European households remain more cautious, with higher savings acting as a drag on consumption.