Insider Economy Household real consumption per capita recovers in both euro area and EU

Household real consumption per capita recovers in both euro area and EU

In the third quarter of 2020, household real consumption per capita increased by 12.1% in the euro area, after a decrease of 10.3% in the previous quarter. Household real income per capita increased in the third quarter of 2020 by 4.3%, after a decrease of 2.9% in the second quarter 2020. These data, which come from a detailed set of seasonally adjusted quarterly European sector accounts, are published by Eurostat, the statistical office of the European Union.

In the EU, household real consumption per capita increased by 11.4% in the third quarter of 2020, after a decrease of 9.9% in the previous quarter. At the same time, household real income per capita increased by 3.8% in the third quarter of 2020, after a decrease of 2.8% in the second quarter 2020.

During the third quarter of 2020, household gross adjusted disposable income increased by 4.0% in the euro area and by 2.8% in the EU. In both cases, the main reason was the significant recovery in wages. Gross operating surplus and mixed income of households and property income and other current transfers contributed positively, unlike in the second quarter 2020. Conversely, current taxes and net social contributions had a strong negative contribution that attenuated the increase of the gross disposable income, while the contribution of social benefits was negative as well.

In the third quarter of 2020, the saving rate decreased by 7.2 percentage points (pp) in the euro area, compared to the previous quarter. In the EU, it decreased by 7.3 percentage points. The household saving rate decreased in all Member States, for which data for the third quarter of 2020 are available. The highest decreases were observed in Poland (-11.9 pp), Belgium and France (both -10.7 pp), and the lowest in Sweden (-0.1 pp), Austria (-1.8 pp) and Czechia (-2.5 pp).

In all the cases, the decrease of the saving rate was explained by the strong recovery of individual consumption expenditure. The increase in the individual consumption expenditure of households was the most pronounced in Spain (+19.9%) and France (+18.7%). At the same time, the gross disposable income increased in all Member States, especially in Austria (+11.4%) and Sweden (+10.3%).

In the third quarter of 2020, the investment rate increased by 0.8 percentage points in the euro area and 1.0 percentage points in the EU. Among the Member States, for which data are available, five Member States recorded an increase of the household investment rate, with the highest values in Italy (+2.1 pp), France (+1.9 pp) and Belgium (+1.1 pp).

The household investment rate remained stable in Denmark and Portugal and decreased in six Member States, with the largest decreases observed for the Netherlands (-0.7 pp), Sweden and Finland (both at -0.5 pp).In the third quarter of 2020, the investment rate increased by 0.8 percentage points in the euro area and 1.0 percentage points in the EU.

Among the Member States, for which data are available, five Member States recorded an increase of the household investment rate, with the highest values in Italy (+2.1 pp), France (+1.9 pp) and Belgium (+1.1 pp). The household investment rate remained stable in Denmark and Portugal and decreased in six Member States, with the largest decreases observed for the Netherlands (-0.7 pp), Sweden and Finland (both at -0.5 pp).

(CNA)

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