High inflation and slow post-covid economic recovery put Spain and Portugal at the bottom of the organization. The families that suffered the least were those who recorded the greatest fiscal support
Household income per capita grew in the OECD for the first time since early 2021, but the same did not happen in Spain. Specifically, household income grew by an average of 0.2% in the group of 35 countries that make up the organization in the third quarter of 2022, while in Spain it fell by 2.8%, according to data provided by the entity this Wednesday.
The country where real disposable household income grew the most was Austria (10.1%) thanks to the government’s ambitious tax reform that boosted household income. Among the G7 economies, France, Germany and Italy posted the largest increases in the third quarter of 2022, around 0.8%.
In terms of household income in the third quarter of 2022 compared to pre-pandemic levels, they exceeded these levels in all but six of the OECD countries, including Spain. Specifically, the group of countries in the organization already has a household income per capita higher than that of 2019, except in the Czech Republic, Denmark, Finland, Portugal, Spain and the United Kingdom. Our country shows the largest gap with pre-pandemic income, where it has fallen by 7.8% since the fourth quarter of 2019.
The OECD report indicates that the poor performance of Portugal and Spain is due to the slow economic recovery of households after the collapse of the first months of the pandemic. In these countries, income associated with self-employment (self-employment), which contributes about one-fifth to household disposable income, the document revealed. In the first half of 2020, Portugal and Spain were the ones to record the largest declines in this type of income, recovering “very slowly”, while most OECD countries saw “solid growth” in this income after the recession. Initially due to the pandemic.
It should also be taken into account that the countries that reached the covid crisis with a larger fiscal margin, thanks to lower debt ratios and government deficits, were able to assist families with more extensive aid and without delving further into this budget deficit . For this reason, countries such as Portugal and Spain, where it was close to 100% of GDP when the pandemic hit, are proving more difficult for families to emerge from the crisis.
Source: La Verdad
I’m Ben Stock, a journalist and author at Today Times Live. I specialize in economic news and have been working in the news industry for over five years. My experience spans from local journalism to international business reporting. In my career I’ve had the opportunity to interview some of the world’s leading economists and financial experts, giving me an insight into global trends that is unique among journalists.