Portugal is among the 11 OECD countries that recorded falls in real per capita household income in the 3rd quarter of 2023. Spain had the biggest drop, due to higher taxes.
The real per capita income of Portuguese families fell by 0.28% in the third quarter of last year compared to the previous three months. This is a drop slightly above the OECD average, which was 0.2% in this period, interrupting the growth cycle of the previous four quarters, the Organization for Economic Cooperation and Development revealed yesterday. The index in Portugal fell from 110.80 in the second quarter to 110.49 in the third, according to the data. Year-on-year, the index grew from the 106.45 recorded in the third quarter of 2022.
This OECD indicator assesses the economic well-being of populations, measuring purchasing power through the evolution of household disposable income from wages, pensions, social benefits and investments, minus taxes and social contributions paid, and taking into account the effect of inflation.
The OECD also publishes GDP per capita and, in this regard, in Portugal, the indicator fell by 0.26% in the third quarter of 2023 compared to the previous quarter, standing at 114.79, below the OECD average of 0.3% growth.
Compared to the same quarter last year, i.e. between July and September 2022, Portugal recorded an improvement of 1.82%, with the index standing at 112.97.
Of the 21 OECD countries with available data, ten recorded decreases in real household income per capita, notes the organization. Spain stands out on the negative side, being the country that saw the biggest contraction between July and September last year, by 2.1% to 97.61, due to the “increase in taxes on income and wealth”, reads the OECD note. However, comparing the index with the same period last year, there was an increase of 5.1%.
Apart from Spain, the biggest quarterly falls were in Austria, down 1.31%, and Ireland, down 0.95%.
The other eleven countries that submitted data saw their index rise. The most favorable was Hungary, with an increase of 5.5%, as a result of “strong growth in compensation of employees, self-employed income and property income”, reads the OECD note. It was followed by Poland, with a 2.91% rise, and Italy, with a 1.45% increase in the index, for the same reasons as Hungary, the organization points out.
In Europe’s largest economy, Germany, real household income per capita fell by 0.6% and GDP per capita fell by 0.1% for the fourth consecutive quarter. France also recorded a 0.1% drop in both indicators.