This is a general drop in income that has affected OECD countries in the first quarter of 2022. According to the organization’s Growth and Economic Well-Being study, the real income of households, that is, of the Subtracting inflation, it fell by 1.1% in this period. This trend is explained in part by the acceleration of inflation in recent months. But this decline is even more marked in some countries, such as the United States, France and Germany. During the first three months of the year, the real income of the French fell by 1.9%. This is the largest drop observed among the countries considered in this work.
However, France is also one of the European countries where consumer price increases are less significant. With inflation measured at 4.8% by INSEE in April, but estimated at 5.4% by Eurostat according to the harmonized price index, the country has the 18th lowest rate of the 19 countries in the euro zone. Far behind are Estonia (19%), the Netherlands (11.2%), Spain (8.3%), Germany (7.8%) and Italy (6.6%).
A drop in nominal income in question
Therefore, it is mainly the evolution of nominal incomes (before inflation is subtracted) that explains this result in France. “In the first quarter of 2022 (first quarter of 2022, editor’s note), nominal real household income in France only increased by 0.1%, which is lower than most European countries,” the OECD clarified. .
By comparison, this indicator increased by 1% in Germany, while real household income fell by 1.80% across the Rhine. In the Netherlands, nominal income rose by 5.1% in the first quarter and fell 0.5% after subtracting inflation. We thus see that, in our German and Dutch neighbours, inflation, higher than that of France, has logically weighed more heavily on the evolution of real income.
A reaction effect after the payment of compensation for inflation?
But this drop in real household income in France may be less a sign of a lasting trend than a reaction effect. “In the first quarter of 2022, the gross disposable income of households decreased (…) mainly due to an automatic reaction to the payment of the ‘inflation premium’ at the end of 2021,” INSEE wrote in its latest quarterly summary of household income. .homes. In the fourth quarter of 2021, real household income increased by 0.9%. This was the highest growth seen in the G7.
On the other hand, when we observe the evolution of this indicator over a year, the situation seems less unfavourable. Between the first quarter of 2021 and the first quarter of 2022 it is almost the same in France with growth of 0.1%, according to OECD figures. A relatively good result compared to other G7 countries in particular. By way of comparison, in the same period, real household income fell by 0.4% in Germany, 1.6% in Great Britain, 11.5% in the United States and 4.6% in the United States. whole of the OECD.
Source: BFM TV
