The high rate of private consumption in Greece constitutes an obstacle to the strengthening of investments, according to a report published on Tuesday by Eurobank.
In the report the lender’s analysts show that in 2013 the Greek rate of private consumption amounted to 71.21 percent of the country’s gross domestic product, while the average level among the 15 old members of the European Union amounted to 56.92 percent.
“The significant spread between the Greek rate and that of the other countries in the EU-15 shows that the domestic resources that can finance investments in the Greek economy are much smaller in comparison with those in the other economies,” the report reads.
It adds that the swelling of private consumption from 2001 to 2009 relied on the high growth rate of the economy, the low cost of borrowing, credit expansion and the accumulation of wealth at the time. “In 2009 the Greek economy had one of the highest per capita levels of private consumption among the EU-15, but in 2013 that dropped to second from bottom, only above that of Portugal,” it explained.
“The high level of wealth, reflected in the high per capita private consumption, was significantly and abruptly lowered during the period of the great Greek depression, up to 2013,” the Eurobank analysts noted in their report.