By Sotiris Nikas
The quarterly disposable income of Greek households contracted by an average of 31.8 percent, or 14,181 euros, in the five years since the start of the financial crisis, according to data released on Monday by the Hellenic Statistical Authority (ELSTAT), while it showed an annual decline of 8 percent, or 2.6 billion euros, in the third quarter of 2013.
Third-quarter figures showed that households’ spending money dropped to 30,400 euros from 44,581 euros in the July-September period in 2008, meaning that it has gone back to quarterly levels unseen since the October-December period of 2002.
Fiscal adjustment policies implemented in the last few years have led to a drastic decline in household incomes either because of shrinking salaries, pensions and benefits, and the loss of jobs or because of increases in taxation.
The 8 percent drop in disposable income in the third quarter of 2013 is mostly attributed to a 9.9 percent decline in salaries and a 8.2 percent reduction in the social benefits that households receive.
ELSTAT data also pointed to a 10.2 percent fall in consumer spending in Q3 from the same period in 2012, amounting to 32.4 billion euros against 36.1 billion a year earlier. The savings index, i.e. the ratio of gross savings to the gross disposable income, was minus 6.7 percent in July-September 2013, compared with minus 9.3 percent the year before.
The worst year for family incomes was 2012, when the annual reduction amounted to 11.5 percent, while in 2010 the decline reached 9.5 percent year-on-year. The quarter with the highest household income since records started (in 2000) was the second of 2007, when it amounted to 48,526 euros. The all-time low on a quarterly basis was the disposable income recorded in the third quarter of 2000, reaching just 26,749 euros.
On the positive side, the net loan requirements of the general government shrank to just 1.2 billion euros in the same quarter, from 6.4 billion a year earlier. Furthermore there was a net surplus in the external balance of goods and services of 2.6 billion euros, up from a surplus of 1.8 billion in the summer quarter of 2012.