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Drop in Swedish Household wealth


 




Thursday, 23 June 2011
Swedish households' financial wealth decreased during the first quarter of 2011 after the peak notation of the previous quarter. At the end of the first quarter households' wealth amounted to Skr 3 756 billion, a decrease of Skr25 billion. A contributing factor was the weak negative development on the Swedish stock market.

Households' financial wealth, financial assets minus liabilities, has grown considerably during the last fifteen years. Above all, households' share-related assets have increased significantly in value. Wealth decreased sharply in connection with the financial crisis but has gradually increased since then. At the end of 2010, wealth had not only recovered from the downturn but had also risen to the highest value ever. However, during the first quarter of 2011 households financial wealth decreased by SEK 25 billion and amounted to a total of SEK 3 756 billion at the end of the quarter.

Households' financial savings, that is, transactions in assets minus transactions in liabilities, were negative during the first quarter and amounted to minus SEK 6 billion. During the last fifteen years households' financial savings have never shown negative savings during the first quarter.

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Households made net sales, purchases minus sales, of both bonds and funds during the first quarter. Net sales of bonds, which have been going on for five quarters in a row, amounted to SEK 9 billion during this quarter. Net sales of Swedish funds amounted to SEK 5 billion, most of which were equity funds. At the same time households made net purchases of Swedish quoted shares for SEK 6 billion.

Households increased their loans in banks and housing credit institutions by SEK 30 billion during the first quarter. Not since 2005 has the increase in borrowing been so low. At the end of the quarter, loans with banks and housing credit institutions amounted SEK 2 449 billion, which accounts for 84 percent of households' total debt.

Monetary financial institutions, which among other things include banks, housing credit institutions and finance companies increased their net lending to non-financial corporations by SEK 39 billion during the first quarter. This is the highest level since the fourth quarter of 2008. Between the third quarter of 2009 and the third quarter of 2010 the annual growth rate for net lending was negative, implying that the lending stock decreased. That lending has now returned to those levels that existed before the financial crisis can be explained by the growing amount of investments in the business sector.

Financial savings of central government amounted to SEK 58 billion during the first quarter, which is unusually high. During the first quarter many government bonds and treasury bills matured and the need for new borrowing went unnoticed.
The market value of the central government debt amounted to SEK 1 224 billion at the end of the first quarter, corresponding to 37 percent of GDP. Central government debt decreased by SEK 49 billion during the first quarter of 2011.
News sources: Statistic Sweden


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