Overtaxation hurts private consumption


Conditions of weak growth and high unemployment look set to continue in the Greek economy, as despite the increase in exports and investments, private consumption remains stagnant due to overtaxation, according to Alpha Bank’s weekly economic bulletin.

“The drop in private consumption in the first quarter of 2018 coincides with households’ limited consumption capacity due to the excessive taxation imposed both through direct and indirect taxes. According to Bank of Greece estimates, private consumption is expected to show a small 0.8 percent increase in 2018, which will be supported by the increase in employment and the negative mean trend toward savings,” the bulletin read.

The bank’s analysts point out that, with the exception of the significant annual rise of 33 percent in car sales, all other indexes point to weak growth in private consumer spending: The retail sales volume index grew by just 0.6 percent on an annual basis in the January-April period, against an increase of 1.1 percent in the whole of 2017.

Also takings from value-added tax slipped 0.3 percent, illustrating the weak demand in the market, Alpha noted.