Disposable income has shrunk

Per capita real disposable income of Greek households shrunk 1.9% in the first quarter of 2024 compared to the final quarter of 2023, data released Monday by the Organization for Economic Cooperation and Development show.

This is the greatest drop among the 38 OECD members, which, on average showed real per capita disposable incomes rising 0.9%.

According to data released recently by the independent Hellenic Statistics Authority, per capita nominal disposable income rose 1.1% in the first quarter compared to the same period in 2023. But inflation rose around 3%, so real disposable income was down year-on-year. Monday’s OECD report provided further confirmation, this time quarter-on-quarter, that inflation is hurting real incomes.

There were five other OECD countries that saw real disposable incomes decline: Belgium (1.4%), the Czech Republic (1.4%), Australia (0.7%), Hungary (0.7%) and Denmark (0.2%).

The greatest income gains were posted by Poland (10.2%). This astonishingly high figure was the result of wage and social subsidy increases and income derived from property, which has more than tripled since the end of 2021.

Among the OECD members who are also part of the G7, the greatest income growth was posted by Italy, which turned around the negative figure posted in the previous quarter thanks to wage increases and in-kind social subsidies. Wage hikes also played a big part in the 1.4% income rise, while in France, the increase in pensioners’ subsidies, designed to counter the effects of inflation, boosted incomes 0.6% quarter-on-quarter. Gains were also posted by the UK (0.3%) and the US (0.2%).

While Greece’s per capita GDP rose 0.85% quarter-on-quarter in early 2024, the country has still to overcome the effects of its earlier protracted financial crisis: Per capita GDP is at 84% of what it was in the first quarter of 2007, and real per capita income is at 79.65%. OECD members’ per capita GDP is at 118% and real per capita income at 122% of 2007.