European household account: a turbulent story

Once protected by the logic of “whatever the cost”, household purchasing power in Europe is now threatened by inflation. After the pandemic, public policies are being solicited once again to help reduce the loss of purchasing power, albeit without really succeeding. In 2022, the real disposable income of Eurozone households is expected to decline by about 2.5%. Consumption is still rising, but only because the household savings rate is declining, a trend that masks extremely diverse situations.

In 2020, household purchasing power (i.e. real disposable income) in the Eurozone was preserved, even though economic activity had collapsed, halted by the Covid-19 pandemic. Exempt from bankruptcies and unemployment, the worst recession to date (Eurozone average GDP declined 6.5% in volume) was also the most unusual one.

Activity plunges in 2020, but revenues hold up