ECONOMY

Cost of living has soared

Households with low incomes cannot make ends meet as monthly expenses outweigh revenues

Cost of living has soared

The soaring prices are smashing family budgets, with less well-off households suffering most as the monthly costs of food, heating, power, fuel and rent easily outstripping monthly incomes.

However, middle-income earners are also feeling the heat, as, after covering their basic needs, there is no money left for recreation and entertainment, such as nights out and travel, let alone for savings. To make ends meet most households are having to change their purchasing habits, or exclusively use public transport, or even move to smaller apartments.

Based on the latest Family Budget Survey and the most recent data from the Hellenic Statistical Authority (ELSTAT) on the course of prices in Greece, a household with a monthly income of 750 euros has to cover expenses of €918 per month. Last year such households (that paid rent) had a monthly deficit of €45 euros, but one could assume this would be covered by holiday bonuses, which add up to two monthly salaries in the private sector. Yet the additional burden of €123 per month (or €1,476 per year) cannot possibly be covered by the leave allowance and the Christmas and Easter bonuses.

Last year, every month, that same household would pay an average of €167 for food, €300 for rent, €43 for electricity, €13 for central heating and €40 for transportation – i.e. a total of €562.83 for their basic needs, or 75% of their incomes. This year that has reached 88% of the monthly income, with an extra burden of €73 due to the hikes in food, fuel and electricity. That household this year has to spend some 42% of its monthly income on electricity, food and heating oil alone, against 33% just a year ago.

Households also have to spend much more money for apparel purchases as well as at restaurants and hotels. Those categories, along with a number of durable goods in the market, are expected to be the first to suffer a major blow from the curtailing of expenditure households are increasingly forced to resort to in order to cover their basic everyday needs.