Household savings fell to 12.7 per cent in the second quarter of 2024 the Central Statistics Office (CSO) said. The rate was down from the 14.6 per cent recorded in the first quarter of the year.
However, the CSO said the number was not part of a clear trend as the savings rate had been both rising and falling since 2023.
The latest decrease in the savings rate comes as household consumption rose from €36 billion to €38 billion year on year.
Statistician in the national accounts analysis and globalisation division Peter Culhane said the savings rate “had increased slightly in the previous quarter but has now decreased again”.
The European Central Bank announced a 0.25 per cent interest rate cut on Thursday, leaving rates at 4 per cent.
The Irish consumer price index has risen by 2.2 per cent from June 2023 to June 2024. However, some sectors of the economy such as transport and hospitality had larger price increases over the same period, at 4.9 per cent and 4.4 per cent, respectively.
According to the services index, the accommodation and food sector of the economy saw a 7 per cent growth in the second quarter.
Although the sector may have been helped by the 6 per cent rise in household consumption in the latest quarter compared with the same period last year, disposable income has dropped by one per cent since the first quarter of 2024.
However, the retail services index shows that overall volume was marginally down by 1 per cent with the furniture and lighting sector dropping by 7 per cent.
In regard to pay, wages in public administration roles saw the biggest positive change since the last quarter with wages rising 3 per cent, or €302 million. Meanwhile, jobs in administration and support services saw the largest decrease in pay across the sectors with pay packets dropping by €190 million, or down 3 per cent.
It comes as August 2024 data for inflation was released on Thursday showing inflation rising by 1.7 per cent compared with the same month last year. It is the first time in more than three years Ireland has had an inflation rise of less than 2 per cent.
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