ZURICH, April 22 (Reuters) - Swiss consumers are set to boost the country’s post-COVID-19 economic recovery, economists say, by using the mountains of cash saved during the crisis to fuel a spending spree.
Wealthy Switzerland’s savings rate - the average amount of disposable income not spent - rose nearly 50% last year, to 19.9% from 13.8%, as restrictions to curb the pandemic cut consumption, according to the KOF Economic Institute.
Households saved 89 billion Swiss francs ($97.27 billion), a jump from 60 billion francs put aside in 2019.
“During the COVID crisis last year there were simply less opportunities to spend money,” said KOF economist Michael Graff.
“People may have been buying more books on Amazon or more takeaway pizzas, but they couldn’t travel or go out to restaurants, for example.
“We think there will be a big rebound in spending after the restrictions are fully lifted. People are already discussing what they will spend the extra cash on.”
Credit Suisse estimates the savings rose even higher, to 30%, during the peak lockdown from mid-March to mid-May, before settling down to average of 20% across the year.
Each household on average accumulated an additional 3,000 francs after the first lockdown and another 880 francs during the second shutdown later in the year, Credit Suisse said.
The government is also expecting the deployment of savings to be an “important contributor to the economic recovery this year, and next year”, said Ronald Indergand from the State Secretariat for Economic Affairs.
Government support measures like short-time working and compensation for lost earnings helped cushion the impact of the crisis for many households.
Credit Suisse economist Claude Maurer estimates an additional 12 billion francs was saved during the first lockdown and another 3.5 billion francs during the second, which is now being partially lifted.
Around two-thirds of this money will be spent, he said, increasing private consumption by 3.5% this year.
Switzerland traditionally saves more than other countries as high incomes leave more cash after paying for essentials.
Most of the impact of the extra spending is expected to come in the second and third quarters of this year, KOF’s Graff said.
KOF expects Swiss GDP to increase by 3.7% in 2021, and 2.5% in 2022, both above the long-term average of around 1.7%. Credit Suisse estimates increases of 3.5% in 2021 and 2% in 2022.
Other European countries have also seen savings increase, which could help fuel their economic upswings.
French think-tank OFCE calculates that the French economy could grow 6.0% next year if households spend a fifth of the extra savings built up in 2020 and 2021.
German GDP growth could rise to 5.5%, and Britain’s by 5% if people draw down cash they have stashed away, OFCE said.
“If you restrict people from buying and then ease ... there will be an increase of people going out and buying more stuff,” said Maurer. ($1 = 0.9150 Swiss francs) (Reporting by John Revill; Additional reporting by Leigh Thomas in Paris; Editing by Catherine Evans)