Salaries and benefits dropped 11 pct in a year

Household incomes declined by almost 2 billion euros in the first quarter of the year from the same period in 2012 as a result of significant drops in salaries, pensions and social benefits, data released by the Hellenic Statistical Authority (ELSTAT) showed on Thursday.

Disposable incomes shrank by 1.9 billion euros in the January-March period on a yearly basis as employee salaries contracted by 11.1 percent and social benefits to households fell 11.7 percent.

The ELSTAT data point to a 6.2 percent annual decline in the disposable income of households and non-profit foundations, from 30.9 billion euros in 2012 to 29 billion in the first quarter of 2013.

The statistics authority’s report further revealed that the final consumer expenditure of households contracted by 8.9 percent compared to the same quarter last year, dropping from 35.6 billion to 32.4 billion euros, which means that consumption is rapidly adjusting to the reduction in incomes. Illustrating this is the savings rate – i.e. the ratio of gross savings to gross disposable incomes – which was negative by 11.7 percent in the first three months of this year, against a negative 15 percent in the same period of 2012.

Gross investment of fixed capital by non-financial companies was down 3.5 percent, dropping from 3.17 billion euros in 2012 to 3.06 billion this year. The investment rate – i.e. the ratio of gross investment of fixed capital to gross added value – was 21.1 percent this year, up from 20.3 percent in 2012, according to the ELSTAT data.

Net requirements for loans issued overseas for the whole economy in the first quarter of the year came to 4.8 billion euros, down from 5.7 billion euros in the same period of 2012, which constitutes a 15.7 percent decrease. The decline in net borrowing is attributed to the drop in the trade deficit, which in turn came about due to a continuing decline in imports.

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