Family real income per capita in the OECD area increased by 0.9% in the first quarter of the year, compared to 0.3% in the previous quarter, while real GDP per capita grew by 0.3%. Italy saw the strongest increase (3.4%), thanks to higher wages and social transfers, reversing the previous quarter’s decline. Germany also experienced a significant increase in real family income per capita compared to the previous quarter (1.4% versus 0.1%), partly driven by higher employee compensation, while real GDP per capita increased by 0.2% compared to the previous quarter’s 0.6% decrease. Canada saw a 0.6% increase in real family income per capita, rebounding from a 0.5% decrease in the fourth quarter of 2023, while real GDP per capita declined for the fourth consecutive quarter (by 0.2%).
France recorded a 0.6% growth in real family income per capita, mainly supported by an increase in basic pension benefits to keep up with inflation. The United Kingdom and the United States saw smaller increases in real family income per capita (0.3% and 0.2%, respectively). The OECD report notes that most other countries in the OECD saw an increase in real family income per capita in the first quarter of 2024, with Poland standing out with the largest increase (10.2%), primarily due to higher wages, various social benefits other than social transfers in kind, and property income more than tripling in Poland since the end of 2021 mainly due to higher interest income in anticipation of higher interest rates. The largest contraction in real family income per capita was recorded in Greece (-1.9%), despite a 0.9% increase in GDP per capita.
Italian Prime Minister Giorgia Meloni celebrated the news that real family incomes in Italy had grown by 3.4% in the first quarter of 2024, marking the strongest increase among G7 economies. Meloni noted that this growth indicates that incomes in Italy are finally outpacing inflation after years of declining purchasing power for families. She acknowledged that there is still much work to be done, but sees these signs as evidence that Italy is on the right path. The positive economic data for Italy, especially in terms of family income growth, is a welcome development and a step in the right direction for the country’s economic recovery.
Overall, the OECD report highlights various countries’ performance in terms of real family income per capita and GDP per capita. While Italy, Germany, and Poland saw significant increases in real family income per capita, other countries like the UK and the US had more modest growth. France’s growth was driven by pension benefits, while Canada experienced a rebound in family income after several quarters of decline. Greece, on the other hand, saw a contraction in family income despite GDP per capita growth. These variations in income growth reflect different economic realities and policy measures in each country, with some experiencing more robust growth than others in the first quarter of 2024.
The report underscores the importance of these income trends in understanding the overall economic well-being of households in different countries. Real family income per capita plays a crucial role in determining individuals’ purchasing power and standard of living, making it a key indicator of economic health. The positive growth in family income in several OECD countries, including Italy, Germany, and Poland, signals a positive trend towards improving living standards and economic prosperity for households. The variations in income growth across different countries also underline the importance of targeted policy measures to support income growth and ensure sustainable economic development for all citizens.
