Household consumption and income decline across Euro area and EU in Q1 2025

by   CIJ News iDesk III
2025-07-25   17:59
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Household real consumption and income per capita declined in both the euro area and the European Union during the first quarter of 2025, according to newly released data from Eurostat.

In the euro area, real household consumption per capita fell by 0.2% compared to the previous quarter, when it had risen by 0.4%. At the same time, real income per capita dropped by 0.1%, reversing the 0.2% gain recorded at the end of 2024. The EU recorded similar trends, with household consumption per capita down 0.3% and real income falling by 0.2%, following previous quarterly increases of 0.4% and 0.3%, respectively.

The decrease in real consumption and income comes despite a nominal rise in household gross disposable income, which increased by 0.8% in the euro area and 1.0% across the EU. This nominal growth was mainly driven by a strong contribution from employee compensation. However, this was partially offset by higher current taxes and net social contributions, which had a negative effect.

The household saving rate saw a modest increase in the first quarter. It rose by 0.1 percentage points in the euro area and by 0.2 percentage points in the EU. Among the countries that reported data, Hungary registered the most significant rise in saving rate, climbing 1.6 percentage points. Belgium and the Netherlands also recorded increases of 0.7 percentage points each. In contrast, Greece and Portugal experienced the largest declines, with saving rates falling by 3.6 and 3.0 percentage points, respectively.

The household investment rate remained unchanged in both regions. Four countries reported increases in investment rates, six saw no change, and five experienced declines. The Netherlands posted the largest gain at 0.6 percentage points, followed by Denmark with 0.2 percentage points. The most notable decreases were seen in Belgium (-0.5 pp), Greece (-0.3 pp), and Hungary (-0.2 pp).

The report also provides a broader comparison of household indicators by country. While some economies such as Belgium and Hungary showed strong nominal income and consumption growth, others, including Greece and Portugal, struggled with contracting disposable income and falling household investment. On average, the euro area’s saving rate stood at 15.2%, while the investment rate remained stable at 9.1%. The EU figures were slightly lower, with a saving rate of 14.6% and an investment rate of 8.7%.

These figures highlight ongoing pressures on household finances across Europe, as inflation, taxation, and muted income growth weigh on real purchasing power despite nominal gains in income. The next update of household sector data is scheduled for release on 28 October 2025.

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