Euronews Business examines how real household income per capita and real GDP per capita changed in the first quarter of 2025.
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Real household income per capita fell in many European countries in the first quarter of 2025, compared with the previous quarter. Among Europe’s largest economies, the United Kingdom recorded the sharpest drop, down 1.3%. In contrast, real GDP per capita rose in most European countries.
Household disposable income is the total amount of money households have available for spending after deducting taxes and social security contributions. People use this income to cover their needs or save. It includes wages and salaries, income from self-employment and unincorporated businesses, pensions, social benefits, and earnings from financial investments. According to the OECD, it is an objective measure of material quality of life.
In the first quarter of 2025, among the 16 European countries with available data, ten recorded a decline in real household income per capita, while six registered an increase. Hungary saw the strongest growth, up 1.9% compared with the previous quarter. Belgium (1.3%), as well as Denmark and Italy (1% each), also posted notable gains.
Income in Italy rebounded “from a contraction in the previous quarter, supported mainly by remuneration of employees and net property income” the OECD found.
The Netherlands (0.3%) and France (0.2%) also saw milder increases in real household income.
Real household income declined in the UK and Germany
GDP per capita shows the size of the economy, while household income per capita shows what people actually take home. Real growth adjusts for inflation, providing a more accurate picture of economic change. Real changes in household income reflect the living standards of people.
The UK and Germany saw declines in real household income per capita, by 1.3% and 0.4% respectively. According to OECD experts, this was due to “consumer price inflation eroding nominal income growth."
In the UK, the decline followed a relatively strong increase of 1.5% in the fourth quarter of 2024, while in Germany it represented a second consecutive quarterly decrease of 0.4%.
Portugal recorded the largest decline by 4.5% in real household income per capita. This was “mainly due to a rise in taxes payable” according to OECD. This rise in taxes came after a decrease in the previous quarter as a result of changes in the tax regime.
Households in Austria, Greece, and Czechia also experienced significant declines of 2.1%, 1.9%, and 1.5% respectively. Spain, one of Europe’s five largest economies, recorded a slight decline of 0.2%.
Two Nordic countries, Sweden (-1.3%) and Finland (-0.4%), were also among those where real household income per capita declined in early 2025.
Real GDP per capita rose in most countries
Among 27 countries, real GDP per capita increased in 20, while it declined in seven—mostly by a very small margin. In the EU, real GDP per capita rose by 0.5%, while in the OECD it registered a smaller increase of 0.1%.
Ireland saw the largest increase at 7%, though it often stands out as an outlier in GDP comparisons due to high foreign investment. Economists therefore use GNI, a measure that better reflects Ireland’s real economic activity.
Iceland (2%), Poland and Turkey (both 0.8%), and Czechia (0.7%) recorded growth of over 0.5% in real GDP per capita. Most other increases remained at 0.3% or below.
Denmark (-1.4%) and Luxembourg (-1.3%) saw the sharpest declines in real GDP per capita.
Among Europe’s five largest economies, quarterly changes in the first quarter of 2025 ranged from 0.1% in France to 0.5% in the UK.
The median equivalised disposable income per inhabitant, measured both in euros and in purchasing power standards (PPS), varies significantly across Europe. A Euronews article titled Where in Europe do people have the most disposable income? compares these figures using data from recent years.
