Many Greeks Live on their Savings in the Past 5 Years

Greeks dig in their savings in order to cope with financial obligations and daily expenses in the past five years, according to a Kathimerini newspaper report.

According to the Hellenic Statistical Authority (ELSTAT) retail sales will show a slight growth in the second quarter, contributing to a GDP increase, but analysts warn that many Greeks live on their savings, something that is not healthy for an economy that tries to recover from recession.

According to ELSTAT, retail turnover in June showed an increase of 3.9 percent in volume. Also, GDP increased by 0.4 percent in the second quarter compared to the first.

Consumption is the key contributor to the growth figures. However, analysts say, the increase in consumption is not necessarily a result of the increase in disposable income. Hellenic Federation of Enterprises (SEV) data show that in recent years Greeks have been spending more than their disposable income, given the tax hikes, higher contributions and slashing of wages.

In 2016, the private initiative was 10.6 billion euros higher than disposable income. By contrast, pre-crisis, in 2009, disposable income was 11.5 billion euros higher than private consumption.

Economists call this phenomenon “negative savings.” In Greece, analysts say, we have negative savings, ie the phenomenon of spending your savings in order to get by. This phenomenon started in 2013.

As analysts comment, Greeks withdraw their deposits, sell their houses, spend money they have stashed at home, hide income sources, evade taxes and do everything they can to maintain a consumption level above their disposable income.