October 29, 2020
According to the latest report provided by the Eurostat, in the second quarter of 2020, household real consumption per capita fell by 10.7% in the euro area, while the previous quarter decreased by 3.3%. Additionally, Eurostat noted that, “This decline is the highest since the beginning of the time series in 1999. Household real income per capita decreased in the second quarter of 2020 by 3.2%, after an increase of 0.5% in the first quarter.”
In the EU, household real consumption per capita declined by 12.3% in the second quarter of 2020, while the previous quarter experience a decreased of 3.2%. Eurostat noted, “this decline is the highest since the beginning of the time series in 1999. Household real income per capita decreased by 4.8% in the second quarter of 2020, after an increase of 0.5% in the first quarter of 2020.”
Households gross disposable income and its components, during the second quarter of 2020 declined by 3.3% in the euro area and 5.6% in the EU. According to Eurostat the reason behind this movement is the reduction in wages, also, “Gross operating surplus and mixed income of households and property income (and other current transfers) also contributed negatively.” However, current taxes and net social had a strong positive contribution that altered the drop in gross disposable income, while the contribution of social benefits was positive as well.
As a result of the decline in individual consumption expenditure but increase in disposable income, household saving rate went up significantly in both the euro area and EU by 8.0 and 8.3 percentage points compared to the first quarter of 2020, respectively. Additionally, Eurostat noted, “In the second quarter of 2020, the investment rate decreased by 0.9 percentage points in the euro area and 0.7 percentage points in the EU.”
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