By Evgenia Tzortzi

Despite the huge tax burden on taxpayers during August, bank deposits only declined by half a billion euros that month to 153.4 billion euros, according to data collected by the Bank of Greece.

The relative stability in the level of bank deposits during the month when salary workers, the self-employed and pensioners paid their first income tax installments constitutes a positive development. BoG figures showed that household deposits stood at 130.1 billion euros in August, compared to 130.3 billion euros in July, while corporate deposits went down to 23.2 billion from 23.5 billion euros in July.

The future course of deposits is set to follow tax revenue forecasts that in the last five months of the year (including August) will reach 6.5 billion euros from income tax against just 1.3 billion in the same period last year. Additional revenues are expected from property taxation.

The additional tax obligations are expected to result in an increased outflow of deposits from local banks that have suffered a 12 percent decline compared with end-2011 (when they stood at 174.2 billion) and a 26.8 percent drop since 2010 (when they came to 209.6 billion). In 2009 they totaled 237.5 billion euros, or 35.4 percent more than in August 2012.

The drop in account balances is depriving the economy of badly needed cash and leading to an increase in the credit sector’s dependence on the Eurosystem, which amounted to 131.6 billion euros at end-August. Household funding contracted by 4.8 percent in August on an annual basis, while the private sector’s total debt dropped to 233 billion euros in August from 234.3 billion in July and 252.5 billion euros in August 2011.

The net flow of funding, which is the disbursements of new loans minus the loan repayments, was negative by 1 billion euros in August, which is due to fewer loans to households and enterprises. The funding rate to enterprises was negative in August by 5.3 percent and the corporate debt went down to 111 billion euros from 112 billion in July and 121.3 billion in August 2011. There was a 17 percent drop in the funding of insurance companies, to 7 billion euros, and a 4.7 percent contraction in funding for the self-employed to 13.9 billion euros.

As for households, they saw a negative credit expansion rate of 4.2 percent, with their debt amounting to 108.1 billion euros, from 108.4 billion in July and 115.3 billion in August last year. That concerned 75.5 billion euros in mortgage loan debts, down from 75.7 billion in July and 79.5 billion euros in August 2011.