Gross domestic saving
Also called: GDS, Gross domestic savings rate · Topic: National Income Accounting: GDP, GVA and Welfare · NCERT: Class 11, Ch 6 "Correlation"
Meaning
Gross domestic saving is the total saving of an economy in a year. It adds up saving by three sectors: households, the private corporate sector (companies) and the public sector (government and its enterprises). It is usually given as a percentage of GDP, called the gross domestic savings rate. It matters because saving is what pays for investment in machines, buildings and roads.
Example
Families keep part of their income in bank deposits and physical assets. Companies keep part of their profits instead of paying it all out. Government enterprises earn a surplus. Together these make up India's gross domestic saving, which is about 30% of GDP (check the latest data).
Don't confuse with
- Gross Fixed Capital Formation (GFCF): this is spending on fixed assets, which is investment. Saving is income that is not consumed. The two are linked but are measured separately.
- Household net financial savings: this is only one part of household saving. It fell to multi-decade lows in 2022-23 as household borrowing rose.