Median Household Income Overview
The indicator refers to the median income of a household in a country. Median household income divides households into two equal segments, such that the first half earns less than the median income while the second half earns more. The median income is defined in PPP (Purchasing Power Parity, in Current International Dollars) terms to avoid exchange rate fluctuations due to inflationary tendencies across countries. The median income level is generally accepted as a better indication of well-being or actual income distribution as it is not skewed by disproportionate data.
According to Global Data, the top ten countries with the highest median household income in the world are Singapore, Iceland, Norway, Sweden, Ireland, Luxembourg, Belgium, the United States, Cyprus, and Australia. The average median household income (PPP) was $40,094 in 2021.
Spain Median Household Income Highlights in 2021
Spain’s median household income (PPP) hit $28,365 in 2021, an increase of 1.6% over the previous year. Between 2010 to 2021, Spain’s median household income increased by 28.4%.
According to Global Data, the real GDP growth increased to 5.1% in 2021, following a 10.8% contraction in the previous year. The real household consumption expenditure growth also increased by 4.4% in 2021, following a 12% decline in 2020. Continued recovery in employment, next-generation EU funds, & the ongoing recovery in tourism is expected to support the growth of the household consumption expenditure in 2022.
The Spanish economy grew rapidly after the country obtained EU membership. While per capita income increased, the distribution of income was unequal, highlighting class divisions. From the mid-1980s to the late 2000s, income disparities increased. According to Eurostat, Spain’s Gini coefficient (a measure of income inequality) stood at 32.1 in 2020, compared to France (29.3). A Gini coefficient score of zero corresponds to complete equality, while a score of 100 corresponds to complete inequality. Rising inequality creates political, social, and economic challenges and stifles upward social mobility. Taxes and benefits need to be reformed and redistributive policies need to be framed to tackle high inequality.
Recent trends influencing Global Economic Growth
Increased COVID-19 impact:
As a result of Omicron, a new variant of COVID-19, more cases have been reported worldwide, resulting in the disruption of supply chain management. However, the global vaccination drive has reduced the fatality rate from the coronavirus.
Rising Inflation and Interest Rates:
As a result of rising inflation rates in both developing and advanced economies, central banks have been forced to tighten monetary policy and raise interest rates to keep prices from rising. However, a steady increase in interest rates could cause financial distress in some economies.
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