ECONOMY

Christmas budgets slashed due to higher taxes, healthcare costs

Higher taxes and increased healthcare expenditure – the latter due to social security funds’ reduced contribution – seem set to deprive local retailers and the Christmas market in particular of even more money during the 2014 festive season, according to this year’s annual survey by Deloitte that records consumer trends ahead of the holiday period in Greece and 16 other European countries.

The survey showed that households in Greece have an average budget of 406 euros this Christmas to cover gifts, food and entertainment, down 12.5 percent on last year’s average spending of 464 euros. In 2013 consumers in Greece had expected to spend 451 euros. Although this year looks like turning into yet another with a drop in budgeted spending for the festive period, the rate of that drop has eased compared to previous years.

“The survey illustrates pessimism regarding the future state of the economy,” noted Dimitris Koutsopoulos, consulting managing partner of Deloitte’s Consumer Business Department in Greece, during the survey’s presentation on Wednesday. “This slowdown in the spending decline rate is related to the fact that we have reached bottom,” he added.

In Greece 75 percent of those surveyed expressed pessimism against 5 percent who took a more optimistic view of the future, a slight change on last year when 81 percent appeared pessimistic and just 3 percent optimistic.

Two-thirds of respondents (65 percent) said they are not budgeting any more for the holiday season as they have to pay more tax than last year. This is also the first time that so many consumers – 25 percent – believe they will have spent more on healthcare in 2014 than last year.

Out of the average 406 euros households plan to spend this Christmas, 163 euros is seen going toward food and drinks, 162 on presents and 81 on going out and entertainment. The biggest cuts compared with last year will be in entertainment, which appears set to drop by 21.5 percent.

It looks like there will be a fair amount of disappointment when it comes to gift-opening time this Christmas as there is pretty much no comparison between what Greeks are hoping to receive and what they’ll actually get: Trips rank top of Greeks’ wish lists with 61 percent, with cash in second (58 percent) and apparel in third (57 percent), while books rank sixth (48 percent). In practice, though, books are the No 1 choice when it comes to buying presents (49 percent) because they are cheap. Clothes and shoes come second (45 percent). Sadly, the gift of a holiday doesn’t even make the top 10 for givers.