Greek households continue to dig deep into their savings in order to finance their consumption, with figures from the first quarter of the year showing a marginal increase in consumer spending but in tandem with a significant decrease in the deposits.
The figures were released on Wednesday by the Greek statistics service, EL.STAT.
In the wake of a “tax tsunami” passed in 2016 by the leftist-rightist coalition government, and implemented in 2017, households in Greece appear to be relying their savings in order to pay for all types of taxes, which relevant tax rates also increased this year compared to the last.
Consumer spending increased by 1 percent in Q1 2018, compared to the corresponding period of 2017, and reaching 29.8 billion euros, up by 300 million euros in absolute terms.
Consumer spending was also considered as having a negligible effect on GDP growth for the same quarter, which was measured at 2.3 percent (on an annual basis), with a rise in exports deemed as the most significant factor in the increase.
Households’ spending in Greece usually accounts for roughly 70 percent of annual GDP, meaning that it is a “barometer” for judging the course of the economy.
The rate of households’ savings – defined as the gross rate of savings compared to the gross disposable income – decreased by 11.2 percent in the first quarter of 2018 – only slightly better than the figure for Q1 2017, which dropped by 12.5 percent.
