ECONOMY

Inflation the main source of concern among households

More than half of Greek households expect a deterioration in their economic position in 2003, mainly as a result of inflationary pressures, this year’s annual survey by business research company ICAP reveals. According to the study, titled «Greek Households: Estimates for 2002 and Expectations for 2003,» 50.5 percent of households expect to be worse off at the end of 2003 than a year earlier, compared to 44.5 percent at the end of 2002 and 34.5 percent at the end of 2001. Respondents to the survey on the whole appeared to consider that the effects of inflation outweigh the benefits of high growth rates in the economy. The difference between those expecting a deterioration and those anticipating an improvement from price movements rose from 49.1 percent to 61.5 percent. Pessimism was especially marked among pensioners, two-thirds of whom expect a deterioration. By contrast, households led by self-employed professionals appeared to be the most optimistic. The percentage of households expecting an improvement has fallen from 14.9 percent in 2001 to 13.2 percent this year, while uncertainty has receded sharply from 16.9 percent to 6.2 percent. However, expectations regarding available income appear to have stabilized; in the last two annual surveys, optimists and pessimists were nearly equal at around 34 percent, whereas in 2001 pessimists predominated. The only strong note of optimism appears to be the hope of finding new sources of income and of employment for more members of the family – largely attributed to the prospect of more appointments in the public sector ahead of the upcoming general election. But the general expectation of a deterioration is attested to by the growing gap between those planning to reduce and those intending to increase spending on recreation; this grew from 11 percent in 2002 to 15.1 this year. As regards housing, health and education, the balance between increase and reduction in planned spending has remained positive in the last three surveys, but is on a downward trajectory. There was practically no change in the rate of households intending to purchase property or durable consumer goods – which at 10.7 percent is slightly lower this year than in 2002. The survey was based on a random and representative sample of 600 households from the 2001 population census; responses were provided through questionnaires and personal interviews between May 28 and June 30, 2003.