AS per OECD Report, growth in household
disposable income has, on average, outpaced the rise in GDP for the OECD
area since the onset of the financial crisis in 2007.
Its new Dashboard of Household Indicators shows that disposable income per
capita rose by 8.1% between the first quarter of 2007 and the first quarter
of 2015 for the OECD as a whole, while OECD GDP growth per capita increased
by only 3.2% over the same period.
Martine Durand, chief statistician at the OECD, said “In most OECD countries,
GDP dropped sharply at the beginning of the financial crisis, while real
household income showed more resilience due to both automatic stabilisers
and supportive fiscal policies. However, this masks the fact that patterns
diverge across countries as purchasing power still remains below pre-2007
levels in a number of countries, including Austria, Greece, Ireland, Italy,
Portugal and Spain, and since 2010 GDP per capita growth has outpaced household
income growth in most OECD countries”.
Because broad GDP growth figures are not well-suited to measuring people’s
material well-being, the OECD has compiled the Dashboard to give a more accurate
picture of the economic and financial health of citizens.
The Dashboard brings together household indicators such as disposable income,
consumer spending and confidence, and savings and indebtedness rates. To
help assess how financially vulnerable people are, it also includes the unemployment
rate, the broader labour underutilisation rate and the financial net worth
of households.
Household disposable income rose 0.8% in the first quarter of this year in
the OECD area, twice the 0.4% GDP-per-capita growth rate. The quarter-on-quarter
rise in household disposable income was particularly marked in Denmark where
it rose a provisional 5.9% in the first quarter of 2015 against a background
of per capita economic expansion of 0.4%. In France, purchasing power climbed
1.2% while per capita GDP grew 0.6%. The rise in disposable income was also
marked in Spain (up 1.6%), Portugal (up 2.3%) and the Netherlands (up 1.7%).
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