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 on Wednesday 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 households’ 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 on Wednesday revealed a 2.3 percent 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.