Since the start of the crisis the “households” sector of all euro area countries he shared the weak or negative trend of incomes, consumption and investments as well as an increasingly limited propensity to save. In real terms, in 2012 household income, consumption and investments decreased by 1,9%, 1,4% and 4% respectively; the savings rate fell to 12,8%.
Income has not decreased to the same extent for all households: in most euro area countries, the lowest income groups have suffered a relatively greater reduction in income than the more affluent classes. The widening of the income gap in the extreme classes has led to a increase in the inequality index which, in the euro area, reached a value of 30,5, a record level for this indicator.
Among the negative effects of falling incomes is especially prominent the weak trend of private consumption. According to some studies, an uncertain evolution of both one's own financial situation and the general economic situation tends to depress household expenses, while the return of the index to pre-crisis levels could increase the dynamics of consumption by up to 3%.
Attachments: Focus no. 25 – 08 July 2013.pdf
