Disposable income on the slide

The disposable income of Greek households shrank by about 4 billion euros within just one year, due to reductions in salaries, pensions and benefits as well as a major increase in taxation, according to data released on Friday by the Hellenic Statistical Authority (ELSTAT).

The figures published by the state statistics agency show that in the third quarter of 2012 the disposable income of households and nonprofit organizations in Greece dropped to 33.2 billion euros from 37.2 billion euros in the July-September 2011 period.

This 10.6 percent slide is attributed to the 11.3 percent decline in workers’ salaries and revenues, along with the 10.2 percent reduction in social benefits and the 17.7 percent increase in taxation on incomes and property.

This drop in disposable income is expected to have become even more acute since the end of the third quarter, with the introduction of more austerity measures this winter, including additional taxes as well as cuts to salaries, pensions and benefits. This means that the respective figures for 2013 will show another dramatic decline.

ELSTAT data confirm that households’ disposable incomes have been falling steadily since the first quarter of 2010. The result of that has been the serious drop in consumption, which in the third quarter of last year amounted to 35.9 billion euros, down from 38.2 billion in the same period of 2011, i.e. a decline of 2.3 billion euros or 6.1 percent. The rate of household savings also dropped, by 8.1 percent.

ELSTAT also announced general government spending and revenues figures on Friday.

In Q3 last year revenues went down to 21.1 billion euros from 21.4 billion in the same quarter of 2011, while spending grew from 27 billion to 29 billion euros. This is attributed to the government’s capital transfers to certain banks, amounting to 6.9 billion euros in the context of the program of state assistance to the country’s credit sector.

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