Net disposable income shrinks
Although the economy returned to growth last year, this has not resulted in an increase in citizens’ disposable income, the Hellenic Federation of Enterprises (SEV) suggested on Thursday. It also noted the huge distance the economy has to travel to achieve a model of sustainable development.
Disposable incomes in Greece are yet to recover, which SEV attributes to the increase in social security contributions that ate up 3.2 percent of households’ gross income last year. Consequently, in real terms, net disposable income went down by 0.3 percent in 2017 compared to 2016.
That development also had a negative impact on savings capacity, which deteriorated further in 2017: The savings rate declined from -7 percent in 2016 to -8 percent last year.
As a result of all that, private consumption, which increased by 2 percent in nominal terms and 0.6 percent in real terms in 2017, according to SEV is being supported by the liquidation of deposits and soaring tax evasion. Data from the first nine months of 2017 showed that in nominal terms gross household income rose 1.1 percent or 1.2 billion euros from 2016. This increase derived from the 2.2 percent growth in salaries and the 5.9 percent rise in self-employed professionals’ incomes, while pensions declined 2.2 percent and incomes from property shrank 2.7 percent.
SEV also cited foreign analyses that show Greece ranking 26th among the 28 European Union member-states based on its sustainable development indices, only above Bulgaria and Cyprus.
In a study for SEV carried out by Ernst & Young, which was presented on Thursday, there is a major lack of corporate awareness of the sustainable development model the United Nations set in September 2015.
That model sets 17 targets in response to key issues such as climate change, insufficiency of natural resources and the lack of access of a large share of the global population to food, energy, healthcare and education.