ECB’s New Statistics Show Slight Reduction of Inequality in the Euro Area

8 January 2024

By Isabel Teles – FRANKFURT (Econostream) – Inequality in the euro area has declined slightly in the past five years, according to new experimental statistics published Monday by the European Central Bank.

The Distributional Wealth Accounts (DWA) statistics, to be compiled quarterly, provide data on net wealth, total assets, and liabilities. They also provide information on inequality, since the Gini coefficient for net wealth is included in the dataset, the ECB said in a press release.

‘The DWA results show that, in the euro area, the share of net wealth held by the top 5% of households of the net wealth distribution dropped slightly between 2016 and the second quarter of 2023, while still exceeding 43%’, the ECB said.

In the euro area, household net wealth increased by 29% over the last five years, and ‘was accompanied by a slight decrease in inequality’, the ECB said. Among homeowners, the net wealth increased by 27%, against 17% among non-homeowners.

According to the ECB, the new data would support the monetary policy strategy as updated by the ECB in 2021, allowing an assessment of the ‘two-way interaction between income and wealth distributions and monetary policy.’

However, the DWA data are not adjusted for the effect of inflation, the ECB noted.

‘[F]or recent quarters the DWA capture the impact of developments in sector accounts on wealth distribution, and provide an estimate for the distributional effect of price changes for each instrument’, the ECB said.