Savings rate

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Savings rate

Personal savings as a percentage of disposable personal income.
Copyright © 2012, Campbell R. Harvey. All Rights Reserved.

Savings Rate

The amount a person or organization places in a savings account or similar vehicle as a percentage of total disposable income. Savings are important for long term financial stability as it gives a person or organization a cushion for bad times. The savings rate may be calculated at microeconomic level for personal finances or may be aggregated at the national level to gauge financial health. A low or negative savings rate usually indicates excessive borrowing, spending, or both. On the other hand, a high savings rate may result in slower economic growth as persons and companies are saving instead of purchasing goods and services. See also: Rainy day fund.
Farlex Financial Dictionary. © 2012 Farlex, Inc. All Rights Reserved
References in periodicals archive ?
Mathematically, if the saving rate is 10 percent or 0.1, the multiplier works out to be one divided by that, or 10.
Zaidi stated that saving rate was very low in Pakistan.
In addition, bold steps should have been taken to encourage austerity on a nation-wide basis to raise the national saving rate substantially and to raise the tax-to-GDP ratio from the low figure of 12% of GDP to at least 19% in the immediate future with the long-term target of 25% of GDP.
When Reagan took office in January 1981, the net domestic saving rate stood at 7.8% of national income, and the current account was basically balanced.
China's domestic saving rate in 2018, at 45 per cent of GDP, was nearly two and a half times the US rate of 18.7 per cent.
So, it is essential to get the saving rate up to 20-25 percent, if we want to follow the model of these countries.
Pakistan's low national saving rate could at least be partly attributed to its high rate of population growth, despite large inflow of remittances.
* The saving rate of the gender that is in excess supply will tend to rise.
Though it is not desirable to borrow heavily as debt-driven growth attempts by many countries have gone into vain in the past with few exceptions, yet the fact that Pakistan's saving rate hovers around 13% on average cannot be ignored.
Wing a little longer, and postponing the start of Social Security benefits, can raise annual retirement income by as much as a modestly higher saving rate over several decades of work.
According to the second fundamental law (Piketty 2014, 166-68), the ratio between capital and NDP is determined in the long run by the ratio of the net saving rate (s) to the growth rate of the economy (g):