By the end of 2024, the nominal cash assets of private households in Germany reached a new high of approximately 9,050 billion euros. This increase of 136 billion euros compared to the previous quarter was mainly driven by capital gains in the stock markets and reallocations to short-term deposits.
Drivers of the Increase
- Capital Gains in the Stock Markets: An important factor contributing to the growth of cash assets was the capital gains in the stock markets, which amounted to about 40 billion euros. These gains were primarily due to investments in stocks and funds.
- Reallocations to Short-Term Deposits: In addition to stock market gains, reallocations to short-term deposits like cash and sight deposits also played a role. This trend indicates that many savers and investors are shifting their assets into liquid investments, possibly in response to uncertainties in the economy.
Inequality of Wealth
Despite the record high, wealth in Germany is very unevenly distributed. About half of the total cash assets are concentrated in the wealthiest ten percent of the population, which corresponds to about four million households. These households benefit more from stock market gains, as they invest more frequently in stocks and funds.
Challenges and Perspectives
The coming months could bring new challenges for private investors and savers. Potential challenges include:
- Inflation: Inflation can affect the purchasing power of cash assets, even if nominal assets are rising. This may lead to real net cash assets remaining below the peak of 2022.
- Economic Uncertainties: Global economic uncertainties and potential market fluctuations could influence investment decisions and slow down the growth of cash assets.
Overall, it is evident that cash assets of Germans continue to grow; however, there are significant differences in distribution and influences from economic and market-related factors.