Income support and limits on spending had already led households in advanced economies to build up almost $3.5tn in extra cash by the end of 2020, equating to 7.6% of GDP. And the stockpile of these supranormal savings will continue to grow in 2021. We suspect that this money will be used to pay down debt and invested rather than spent in a hurry. Financial investment will support asset prices, while lower debt burdens will strengthen household finances, potentially supporting growth further down the line.
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