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Real household income rises again in the OECD but the picture is mixed
Real household income per capita grew by 0.9% in the OECD in the first quarter of 2023, exceeding growth in real GDP per capita of 0.3% (Figure 1). This is the third quarter in a row that real household income per capita has grown in the OECD, and the highest quarterly rise since Q1 2021 when incomes were boosted by pandemic-related assistance programmes.
Despite the overall increase in real household income per capita, the picture was mixed across OECD countries in Q1 2023. Of the 21 countries for which data is available, 11 recorded an increase, while ten recorded a fall. Among G7 economies, real household income per capita rose in Italy and the United States while it declined in Canada, France, Germany and the United Kingdom. Canada recorded the largest drop in real household income per capita (-2.2 %), driven in part by lower government transfers to households than in the previous quarter, when extra cost-of-living payments were made. In Germany, both real GDP per capita and real household income per capita fell for the second consecutive quarter.
Italy saw the largest increase in real household income per capita in Q1 2023 (3.3 %) as growth in energy prices eased following the spike in the previous quarter, improving the incomes of households when measured in real terms. In the United States, the gain in real household income per capita (1.7 %) was mainly due to a decrease in taxes payable in Q1 2023[1] after a rise in 2022 (Figure 2) due to increases in wages and salaries, deferred payment of 2020 taxes and strong capital gains.
Among other OECD countries, Poland experienced strong growth in both real GDP per capita (3.9 %) and real household income per capita (3.5%). Large increases in real household income per capita were also recorded in Denmark (4.3 %), Belgium (4.1 %) and the Netherlands (2.6 %).
Source: OECD Household Dashboard database (2023)
Notes:
1. Estimates are not available for Japan.
2. GDP for France and United Kingdom was flat in Q1 2023, with recorded growth of 0.0%.
3. The source database shows estimates for all OECD countries for which data is available at time of publication.
While taxes are usually paid once a year, the national accounts show taxes payable in the period (quarter) in which they accrued
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