An article on 'Personal saving and financial investment: 1951-65' in the September 1966 issue of the Bulletin noted that the marked rise in he saving ratio and the consequent increase in the personal sector surplus during that period were linked with economic growth. The present article surveys developments during the subsequent decade: after changing little on balance for several years, the saving ratio and the surplus began to rise sharply again in the early 1970s, even though the economy grew more slowly than in the earlier period.
'Personal sector' is defined in this article as in the flow of funds accounts. It includes not only individuals but also unincorporated businesses and private non·profit·making bodies.
The article discusses in turn: saving by the sector; its capital expenditure; the surplus resulting from the excess of saving over capital expenditure; the interaction of the surplus with the deficits of other sectors; borrowing by the sector; and the use of the surplus and borrowed funds to acquire financial assets.