Greeks Have Lost a Third of Their Disposable Income
Greeks have lost almost a third of their disposable incomes since the debt crisis started more than three years ago, data showed on Friday.
The reading fell a total of 22 percent in 2009-2012, according to figures provided by national statistics agency ELSTAT. Allowing for cumulative inflation of around 10 percent in that period, the real drop is just under a third.
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Fiscal austerity to comply with the terms of an international bailout coupled with record unemployment eroded purchasing power and consumption, which in Greece accounts for about three-quarters of gross domestic product (GDP), the biggest such share of the 17 countries sharing the euro.
The resulting squeeze on household budgets led to a 16 percent slump in consumption since 2009 when Greece's debt crisis began, deepening the economic slump which is now in its sixth consecutive year.
Weighed by record unemployment and wage cuts to make the country's companies' more competitive, total workers' compensation fell by a quarter. To make matters worse for households, the government slashed social benefits by 15 percent over the same period to save money.
The crisis, accompanied by often violent street protests, did not stop the government from hiking taxes to plug its fiscal gaps. Households' tax bills rose by 17 percent in 2010-2012, according to the figures, after the state increased taxes on income, consumption and property.
The statistics service said the protracted economic malaise also affected households' savings rate, which fell 5.9 percent in the last quarter of 2012 versus a 2.8 percent drop in the same period in the previous year.
Greece's battered economy is expected to contract 4.5 percent this year, based on government projections, before a recovery begins in 2014. This would bring total economic decline in 2008-2013 to almost a quarter - the country's biggest peace-time recession.