The understanding of saving is rather important in order to bring out its importance and also the reason as to why it is important for an individual or at a national level. The most essential aspect here is that the people when deprive some part of their income for consumption it becomes there savings. This amount can be kept in bank accounts and be used later on for different purposes, it is called personal saving. National saving on the other hand is the amount which is inclusive of personal savings along with public savings and the business savings. This amount is largely derived through the medium of taxes which is left after making the expenditures. It can also be said that the interest rates does encourage the level of savings. If the interest rate is higher than the savings would also be rather higher.

What are the Different Saving Rates in Different Countries?

The different countries have different saving rates and thus they help in determine the economic status of the nation. Qatar or example is believed to be the highest in terms of saving rates. It has an approximation of 59% of saving rate in comparison to its GDP. Kuwait and China are also believed to be saving more than half of the GDP in terms of savings, both public and private. USA is believed to be saving approximately 17% of its GDP and India and Singapore including Thailand is also among the countries which do have a higher level of saving level. It can also be stated that the levels of national savings are rather much important for the purpose of bringing in appropriate household savings in place (Alexander D, 2013). Australia is considered a nation which has outgrown the charts and bought about a much higher level of personal saving in terms of increasing it to 20.60 in the first quarter of 2016 (Trading economics, 2016).

The Role in Economics Models

The main role that the economic models do paly in the saving rates is very much dependent on the consumption rates. The consumption taxes are very much levied to be varying in there nature and thus an impact on the saving levels it can also rather be foreseen with the same. With the increase in the consumption rate the rates of the saving level tends to move downwards (Frankel, D. M. , 1998). This also does help in identifying to the fact that the changes in the consumption taxes for example can help in bringing the saving levels on a higher ground. They are thus categorized to bring a change with the model of economics that is being used for the same purpose. The monetary policies which are being applied in Australia help in determine that how the saving rates is getting impacted through the same. The reserve bank of Australia claims to be looking at the inflation rate and thus also targets to not let it fluctuate enough as it does impact the saving rate to a much greater extend. Australia is also becoming among the first few countries that are increasing the rates of interest and thus the saving levels in the nation are said and considered to be much higher in comparison to other countries. The policies of the reserve bank are strong enough to help the people get security for their savings and thus it also does help in improving the status level of the citizen in terms of finances (Barro, Robert J.; Xavier Sala-i-Martin ,1995).

Saving in other terms of economics is also termed as stock of capital. This according to economist means that consumption is less in the present and is more for the future. Taking an example of wheat which if considered to be the only crop to be grown in a country is saved more than consumed will be able to yield more wheat plantation in the future. Thus with saving the investment increase which further brings an increase in the economic growth of the nation.

Here an example of the Australian government’s decision in providing foreign funds to Papua New Guinea can be taken into consideration. It is believed that around 558.3 million dollars will be provided by Australia to bring upliftment in the economy of the country. This helps in showing how the foreign investment of Australia is increasing the standard of Papua New Guinea and how it is even helping Australia to gain much more benefit in the same.


In the end it can be said that the saving level is much more dependent on the different policies which are being generated by the nation itself in terms of the monetary gains that the citizen can enjoy. It is also much regarded to bring an impact on the saving level to a certain extend. As mentioned the consumption taxes play an important role in the saving levels and thus the macro level can be said to be rather impactful form this perspective.

Reference List

Frankel, D. M. (1998). “Transitional Dynamics of Optimal Capital Taxation”. Macroeconomic Dynamics 2 (4): 492–503.

Barro, Robert J.; Xavier Sala-i-Martin (1995). Economic Growth. New York: McGraw-Hill. ISBN 0-07-003697-7.

Trading economics, 2016. “Australia Household Saving Ratio” retrieved on June 3, 2016 available at

Alexander D, 2013 “The World’s Top-Saving Countries, 2013” retrieved on June 3, 2016 available at

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