Top 8 Countries With the Highest Rates of Personal Savings

Jan 31, 2024 By Susan Kelly

When we discuss which nations are the best savers, we refer to those with the most significant savings rates. However, these countries may not be the wealthiest on Earth. For example, if the typical person in a country makes $10,000 and saves $2,000, the country's savings rate is 20%. There is a 20% savings rate in another nation where individuals hold $20,000 every year out of $100,000.

In addition, there are a variety of strategies to save money. Direct personal savings, company savings, and government savings are all possibilities. To calculate the national savings rate, we consider all of these forms of savings. Data on gross domestic savings rates and average household incomes from 2018 and 2019 illustrate this point.

The Top Ten Ways to Save Money

Macao (64.3%)

In the vicinity of Hong Kong, the former Portuguese colony of Macao may be found. As a Special Administrative Region (SAR) of China, Macao had the same advantages as Hong Kong. People in Macao afford a high gross domestic saving rate of 64.3 percent with an average salary of little more than $129,000 in purchasing power parity terms.

Republic of the Congo (61.4%)

Brazzaville is the capital of the Republic of the Congo, a tiny African country. Not to be confused with it’s more prominent neighbor, the Democratic Republic of Congo, which is significantly larger (DRC)? Using buying power parity, the average GDP in the Republic of the Congo is $3,400 per person, whereas that in the Democratic Republic of the Congo is $1,100. With a significant oil export, the Republic of the Congo has a more substantial income and a higher savings rate than the Democratic Republic of Congo.

Qatar (58.1%)

Thanks to Qatar's high income of around $96,000 in purchase power parity term and its oil exports, the country has a savings rate of 58.1 percent. Qatar maintains a fixed exchange rate with the U.S. dollar, common among nations in the Mideast.

Ireland (57.6%)

Even with a high GDP per capita of almost $88,000, Ireland's gross domestic saving of 57.6% of GDP is excellent. Because of Europe's sovereign debt crisis, Ireland's high savings rate is also a response.

Brunei (54.5%)

Located in the vicinity of Indonesia and Malaysia, Brunei is a small oil-rich country with abundant natural resources. With an average annual income of $65,000 in PPP terms, Brunei supports a 54.5 percent savings rate. The Brunei Investment Agency, which is administering the country's sovereign wealth fund, is a part of this effort (SWF).

Singapore (53.8%)

Gross domestic savings in Singapore are 53.8% of the average annual income of $101,000. (adjusting for purchasing power parity). Industrialization in the 1960s was a significant factor in the country's quick rise to prominence. In addition to Hong Kong, South Korea, and Taiwan, Singapore and the other tiger economies have attained full employment due to manufacturing expansion.

Luxembourg (53.4%)

An annual GDP per capita of around $121,000 in purchasing power parity accounts for Luxembourg's high savings rate of 53.4%. Despite its tiny size, Luxembourg benefits from significant savings and high salaries as a Eurozone tax haven.

Gabon (52.2%)

Gabon is a nation in Africa that produces a lot of oil. With a GDP savings rate of 52.2 percent and an average income of $15,000 in purchasing power parity terms, Gabon is well ahead of its neighboring countries when it comes to saving.

Economic Progress, Income, and Savings

Economic growth, earnings, and savings rates are linked in the instances above. There is, however, a lack of clarity on the nature of this link. Intuitively, the assumption that more significant savings lead to increased economic development and better earnings is tempting. According to economist John Maynard Keynes' paradox of thrift, personal savings, on the other hand, might contribute to recessions.

It's also likely that people are saving more money since their earnings are rising. Savings and income are often linked, although this isn't always the case. Rather than high earnings, economic development may be the best explanation for high savings rates in certain nations.

Let's say your income increased by 10% every year, and you could preserve 70% of that gain. At the same time that you were growing your spending by 3% annually, your savings rate would rise to 70% over time. To put it another way, a rise in GDP encourages an increase in consumption and savings.

Inflation, Oil, and Financial Security

Higher savings rates are likewise linked to greater oil riches. Wealthy oil exporters may benefit from the profits, as they have more money to invest. In certain nations, sovereign wealth funds are established to safeguard the country's riches when the country's oil supplies have run out.

Last but not least, governments may enter long-term development agreements with major oil firms. A one-time infusion of funds into the local economy is possible if such a deal is completed. It would be reasonable to predict a rise in the savings rate under this circumstance.

Savings and Taxes

Another contributing element to high savings rates appears to be low taxes. In theory, savings rates would rise if fewer taxes resulted in more significant rewards for savers. As a practical matter, some of the top savers are tax havens, while others have lower tax rates than their surrounding nations. People who have a greater natural saving rate are more likely to go to tax havens than other citizens saving more.

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