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.
Sweden’s Median Household Income Highlights in 2021
Sweden’s median household income (PPP) hit $74,274 in 2021, an increase of 1.6% over the previous year. Between 2010 to 2021, Sweden’s median household income increased by 31.3%.
The real household consumption expenditure grew by 4.1% in 2021. Growth in private consumption reflects the rising employment rate and wage growth. According to Global Data, the real household consumption expenditure is forecast to grow at a slower pace of 3.6% in 2022, due to rising prices.The Gini coefficient for Sweden was one of the lowest in comparison to other EU countries, according to Eurostat. The efficient use of a system of social transfer helps the nation to achieve low levels of inequality.
According to OECD Sweden has a Gini coefficient value of 0.28 which means that the country has relatively lower inequality. The country’s economic fundamentals seem strong and robust, which assures that the trend of high-income and low-income inequality will sustain over the long term.
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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