Household real consumption per capita declined in both the euro area and EU for Q1 2020

July 28, 2020

According to the latest report provided by the Eurostat, in the first quarter of 2020, household real consumption per capita fell by 3% in the euro area, while the previous quarter decreased by 0.4%. Additionally, Eurostat noted that, “this movement was due to the COVID19 containment measures implemented by Member States in March 2020.” However, for the first quarter of 2020, household real income per capita rose 1.1%, after a drop of 1.1% for the fourth quarter of 2019. Also, Eurostat noted, “the drop in the individual consumption expenditure of households were the most pronounced in Italy, Spain and Belgium, followed by France.”


On the other hand, Eurostat noted, “In the EU, household real consumption per capita decreased by 2.9% in the first quarter of 2020, after a decrease of 0.2% in the previous quarter. This decline is the highest since the beginning of the time series in 1999. Household real income per capita increased by 1.2% in the first quarter of 2020, after a decrease of 1.0% in the fourth quarter of 2019.”


Households gross disposable income and its components, during the first quarter of 2020 increased by 0.9% in the euro area and 1.2% in the EU. Eurostat stated, “The reduction in current taxes and net social contributions had a strong positive contribution to gross disposable income, while the contribution of social benefits was higher than usual. The decrease observed in received wages, operating gross operating surplus and mixed income of households contributed negatively in the growth of gross disposable income in both zones.” However, the gross disposable income varied, increasing in Poland, Denmark, Czechia, Ireland, the Netherlands and Finland and decreasing in Spain, Italy, Portugal, Germany and Austria.

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 4.3 percentage points compared to the fourth quarter of 2019. Eurostat noted, “The highest increases were observed in Belgium, Denmark and the Netherlands, and the lowest in Poland, Sweden and Czechia. For all but two Member States, the increase of the saving rate was explained by the strong decrease of individual consumption expenditure.”


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