Highest Increase in Real Income Observed in Portuguese Population
OECD Data Reveals Mixed Real Income Growth Among Members in 2024
According to the Organization for Economic Cooperation and Development (OECD), most of its member countries observed growth in real per capita household income in 2024, with Portugal leading with a significant increase of 6.7%. Remarkably, this growth was mostly attributed to workers' compensation and a decrease in taxes.
However, some countries did not share in this growth; Australia recorded the largest decline of 1.8% due to higher interest and tax payments. Portugal's impressive growth in 2024 contrasts with the previous year's performance of Australia, which saw a record 5.1% fall in real income per capita in 2023.
Across OECD countries, the average real per capita household income increased by 1.8% in 2024, slightly above the 1.7% growth observed in 2023. This growth came after a slowdown in inflation compared to the previous year, which may have contributed to the increased income in many countries.
In the fourth quarter of 2024, real household income per capita in the OECD experienced a 0.5% rise compared to the previous three months. This is a slight acceleration compared to the 0.2% increase recorded in the quarter before. Additionally, real GDP per capita grew by 0.4% during this period.
While the overall income growth was positive in the last quarter of 2024, the picture varied across OECD countries. Nine countries experienced growth, seven experienced a decline, and three remained unchanged. Among the G7 economies, real per capita household income increased in only two countries – the UK and the US – while others suffered contraction or stagnation.
The UK recorded a growth of 1.5%, driven primarily by workers' compensation and social benefits. In contrast, the US saw more moderate growth of 0.3%, also chiefly attributed to worker compensation. Italy registered a decline of 0.6% due to a decrease in net property income and an increase in social contributions. While Germany experienced declines in both real household income per capita and real GDP per capita, Canada and France ended the year with stagnant household income growth.
It is important to note that economic performance and inflation rates had an influence on real household income growth across different countries. Some countries, like Portugal, recorded significant increases due to higher workplace income and lower taxes, while others, such as the US, saw growth primarily benefit higher earners, revealing income inequality concerns.
In conclusion, while the overall trend showed growth in real household income per capita across the OECD in 2024, there was a significant variance in growth rates among the G7 economies. These differences were influenced by various factors, including economic performance, inflation rates, and country-specific factors.
Portugal experienced a remarkable increase of 6.7% in real per capita household income, primarily due to workers' compensation and lower taxes, bolstering the country's property and finance sectors. Conversely, the US saw more moderate growth of 0.3%, mainly powered by worker compensation, suggesting potential income inequality concerns in the finance and business sectors.
