BUSINESS

Consumer spending is still shrinking

DIMITRA MANIFAVA

Poor households spend almost a third of their budget on food.

TAGS: Economy

Figures released on Wednesday by the Hellenic Statistical Authority (ELSTAT) suggested that, on average, households have reduced their annual spending by the equivalent of a monthly salary compared to 2008. Household spending was found to have dropped by 34.4 percent between 2008 and 2016, or an average of 728 euros.

Average monthly consumer spending has dropped every year since the outbreak of the crisis, with the steepest decline from 2010 to 2013.

Data revealed that the total monthly spending of households in 2016 amounted to 5.7 billion euros, down 2.5 percent or 147.2 million euros from 2015. Average monthly spending per household came to 1,392.03 euros last year, down 28.97 euros from 2015.

In 2008 the average monthly spending per household had amounted to 2,120.40 euros, and the sharpest annual decline in absolute figures took place from 2011 to 2012, amounting to 186.92 euros.

Ten out of the 12 main categories of expenditure showed a decline last year compared to the year before: The biggest drop was in durable goods such as cars, large electrical appliances and furniture (down 7.5 percent), followed by spending on recreation and culture (6.4 percent) and on alcoholic drinks and tobacco (5.4 percent). The only categories to observe an increase last year were housing (up 1.8 percent) and transport (0.1 percent).

When incomes decrease, spending focuses on food, and in Greece’s case 20.7 percent of spending went on food purchases, according to the statistics for last year. In the case of poor households, this rate jumps to 32.1 percent. Greece also reports relatively high private spending on healthcare, amounting to 7.4 percent of family budgets – attributable to the state of public healthcare.

Such is the difference with 2008, that back then spending on food accounted for just 16.4 percent of household budgets, and despite the 21.2 percent average decline in expenditure on food the share of this category has risen by more than four percentage points.

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