Australian households have endured the sharpest decline in per capita disposable incomes on record.
Since peaking in Q2 2022, real per capita household disposable income has declined by around 8%.
The chart below shows real per capita household disposable income in a long-term historical context.
The February Statement of Monetary Policy (SoMP) contains forecasts on Australian household disposable income and population growth out to Q2 2027.
The following chart plots the forecast change in real per capita household incomes (shown in red).
The RBA SoMP’s forecasts suggest that Australian real per capita household disposable income will remain around 5% below the Q2 2022 peak in Q2 2027.
Extrapolating the RBA’s forecast suggests that real per capita household disposable income will not recover to the Q2 2022 level until Q4 2031.
In other words, Australian households face a ‘lost decade’ of income growth following the pandemic bubble.
