Salary work­ers’ in­come suf­fers in cri­sis

House­holds saw rev­enues de­cline by a third from 2010 to 2016, while Greeks’ wealth shrank by 37.5 per­cent

Kathimerini English - - Focus - BY PROKOPIS HATZINIKOLAOU

Salary work­ers have been hit hard by the eco­nomic cri­sis, hav­ing seen their in­comes shrink sig­nif­i­cantly from 2010 to 2016: A study pub­lished in the Bank of Greece’s Eco­nomic Bul­letin yes­ter­day shows that house­holds’ nom­i­nal dis­pos­able in­come dropped by 57 bil­lion eu­ros, or 32.8 per­cent, in those six years.

House­holds saw their in­come de­cline from 173.5 bil­lion in 2010 to 116.5 bil­lion eu­ros last year, mainly due to the 31.5 per­cent drop in salaries, from 86.8 bil­lion to 59.4 bil­lion, and the 17.2 per­cent de­crease in so­cial ben­e­fits (mainly pen­sions), from 43.5 bil­lion to 36.1 bil­lion eu­ros.

In the pe­riod from 2009 to 2015, an­nual con­sump­tion fell 31.7 bil­lion eu­ros, from 163.7 bil­lion to 132 bil­lion eu­ros. It ap­pears that the de­cline in con­sumer spend­ing was smaller than the re­duc­tion in house- holds’ dis­pos­able in­come be­cause fam­i­lies used their sav­ings to cover their needs.

In to­tal, the study found that from 2008 up to early 2016, Greek house­holds lost 37.5 per­cent of their wealth. This means there was a sig­nif­i­cant shrink­ing of de­posits and liq­ui­da­tion of hold­ings in se­cu­ri­ties.

Be­fore the cri­sis, house­holds’ port­fo­lios were quite com­plex and dis­played great va­ri­ety, but now sav­ings have di­min­ished as Greeks pre­fer to keep any ex­tra cash un­der the mat­tress. The study found that the share of cash amounted to just 3.2 per­cent in 2008, while by the first quar­ter of 2016 it had soared to 17.1 per­cent due to the eco­nomic un­cer­tainty.

The lat­est data from the Hel­lenic Sta­tis­ti­cal Author­ity (ELSTAT) show that in the third quar­ter of 2016, house­hold in­comes de­clined fur­ther on an an­nual ba­sis, although con­sumer spend­ing re­bounded from Q3 of 2015: The fig­ures re­leased yes­ter­day re­vealed a 2.3 per- cent de­cline, amount­ing to 600 mil­lion eu­ros, in the dis­pos­able in­come of house­holds and of non-profit or­ga­ni­za­tions to 28.9 bil­lion from 29.5 bil­lion eu­ros a year ear­lier.

Con­sumer spend­ing posted a 5.5 per­cent re­cov­ery in Q3 from the same pe­riod in 2015, ris­ing from 30.2 bil­lion eu­ros to 31.8 bil­lion eu­ros, at­trib­uted to the in­creased use of credit and debit cards, which has brought more trans­ac­tions into the le­gal econ­omy from the black mar­ket.

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