Lockdown boosted incomes

Lockdown boosted incomes

This year’s lockdowns led to an increase in households’ disposable incomes and bank savings in the January-March period, according to provisional figures released by the Hellenic Statistical Authority (ELSTAT) on Monday.

Unsurprisingly, the data further confirmed the slump in consumption due to the restrictions that have put the market in a precarious position, while the reopening has yet to result in consumption reverting to anywhere near the levels of 2019.

In the first quarter of the year retail stores (with the exception of food outlets and pharmacies) were open for about 15 days in total, while in the first quarter of 2020 stores and food services has been open up until mid-March.

The ELSTAT statistics showed that the disposable income of households grew 5.1% year-on-year to come to 30.17 billion euros, against €28.71 billion in January-March 2020. The savings rate of households (i.e. the ratio of gross savings per the gross disposable income) stood at 9.8% in Q1, against -2.4% a year earlier. Such high savings rates were also recorded in the second quarter of 2020, when Greece was in its first complete lockdown.

On the other hand, the final consumption spending of households went down 7.4% year-on-year, from €29.4 billion in 2020 to €27.2 billion in 2021. This means the market has missed out on €2.2 billion.

Gross fixed capital formation by non-financial companies amounted to €2.5 billion, with its ratio per gross added value coming to 20.7%, compared to 16.2% in the first quarter of last year.

The state was forced to borrow considerably in that period: The general government sector borrowed a net amount of €7.1 billion in Q1, against €3 billion a year earlier.

There was also a €4.42 billion deficit in the external balance of goods and services, down from €4.52 billion in January-March 2020, plus another €170 million from the external deficit in primary incomes, current and capital transfers, compared to €400 million last year. All this meant a total borrowing of €4.59 billion for the economy.

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