Portuguese households’ financial assets to grow by 3.8% in 2023, but purchasing power falls – Executive Summary

The year 2023 was marked by a surprising recovery in global financial assets, which grew by 7.6%, to reach a total of €239 billion. However, Portuguese households were unable to continue this positive trend, with a modest increase of only 3.8% in their financial assets, well below the regional average of 5.0%.

According to the 15th edition of the Allianz Global Wealth Report, among the factors contributing to this less robust performance is the insurance and pension asset class, which fell by 4.8% for the fourth consecutive year, to levels similar to those of 2005. The proportion of this type of asset in Portuguese households’ portfolios fell to 11.5%, one of the lowest in the region.

Bank deposits and securities fared relatively better, rising by 2.8% and 8.4% respectively. However, new savings in Portugal fell by 66% to €2.5 billion, below pre-pandemic levels.

The data reveals that Portuguese savers maintained a conservative trend, directing their investments mainly towards bank deposits, while other assets, such as insurance and pensions, faced significant outflows. The traditional behavior of Portuguese, which focuses on saving in banking institutions, is still reflected in the figures, as deposits absorbed €6.6 billion of new savings.

In real terms, the scenario is more difficult: adjusted for inflation, Portuguese financial assets would fall by 1.4% in 2023, resulting in a loss of purchasing power of 2.5% compared to 2020.

In contrast, Portuguese household liabilities fell slightly by 0.3%, bringing the debt ratio to 68%, its lowest level this century. Net financial assets also showed a significant increase of 6.2%, although net financial assets per capita of €31,460 dropped Portugal one place in the ranking of the 20 richest countries.