Greece was second only to the US among the member-states of the Organization for Economic Cooperation and Development (OECD) in the proportionate increase of bank deposits during the pandemic, a factor the Greek government expects to boost the country’s post-pandemic recovery.
Bank of Greece figures show that from March 2020 to March 2021, household deposits expanded by 12.5 billion euros, while those of corporations (not including the credit sector) increased by €10 billion. That has taken the sum of deposit growth to €22.5 billion or 14%, the third highest rate in the eurozone behind Estonia’s and Ireland’s. At the same time consumption declined 5.5%, according to the Hellenic Statistical Authority (ELSTAT).
Greece may have not been alone in seeing its bank deposits grow, but its growth rate has been remarkable. Analysts agree there are two reasons for that: the postponed consumption of households due to the lockdown, and the liquidity the state channeled to households and corporations in supporting the economy against the effects of the coronavirus.
Alpha Bank chief economist Panagiotis Kapopoulos explains that the government support measures primarily concerned boosting the cash flow (just like in the US), and not so much collateral, as was the case in many other European countries. In explaining the jump in deposits, he also cites the fact the Greek economy relies to a greater degree than its peers on consumption and services, which froze during the lockdowns.
The data that Dimitris Malliaropoulos, director of Economic Analysis and Research at the Bank of Greece, cites show that out of the €22.5 billion of the deposit increase, some €6 billion was in the form of corporate loans by banks, another €4 billion concerned suspended taxes and state loans, while the other €12.5 billion was pure savings attributed to postponed consumption or precaution. Malliaropoulos invokes the ELSTAT statistics revealing that Greece experienced its highest savings in years by households and corporations in 2020, amounting to 12.8% of gross domestic product.