With retailers desperate for customers and hoping an ongoing annual sales period with discounts up to 80 percent will bring them back, fearful Greeks are so worried about the country’s crushing economic crisis that they have slowed spending almost to a standstill in some cases.
Greece suffered the fourth-highest decline in household consumer spending among the 27 members of the European Union from 2008 to 2011, according to data released Eurostat, the EU’s statistics agency.
Consumer expenditure dropped by 15.3 percent over the three-year period, but 2011 saw Greece register the highest decline in one year, amounting to 7.1 percent, with cuts affecting spending in apparel, telecommunications, transport and furniture. Athens and other major cities across the country are littered with empty store fronts as more than 68,000 stores have closed in the last three years of austerity measures.
The country’s economic policy over the last three years or so has clearly led to major losses in disposable income, the Eurostat data showed. The crisis has had a direct impact on the consumption habits of Greek households, which have seen their incomes hit on two fronts: first via cuts to salaries and pensions, or even loss of jobs with record unemployment, and soaring direct and indirect taxation, except for tax evaders who continue to largely escape with impunity.
The news came after ELSTAT, the Hellenic Statistical Authority announced that households’ disposable income had shrunk by 5.4 billion euros, ($7.31 billion) or 13.6 percent within just one year. Eurostat has confirmed the trend, showing that only the three Baltic states (Estonia, Latvia and Lithuania) suffered a greater decline in consumer spending from 2008 to 2011 than Greece.
The 2011 figures were even worse as the 7.1 percent drop was by far the highest in the EU, with the United Kingdom a distant second with a fall of 0.8 percent. That was a year when salary and pension cuts as well as tax hikes grew bigger, forcing households to reduce their spending in all categories, but more so in transport by 37.5 percent, clothing by 28.6 percent, telecommunications by 28.3 percent and furniture by 26.6 percent.
Economic sectors that have been hit hardest by the crisis, while the decline in consumption has grown in 2012 and at the start of this year. Eurostat has also recorded the drop in per capita consumption in Greece in 2011. The average amount spent by each Greek came to 15,000 euros ($20,300) throughout 2011, which is below the average in the EU, at 17,500 euros ($23,717), and in the Eurozone, at 20,000 euros ($27,105.) Portugal, however, fared even worse, with average spending amounting to 12,500 euros per person, ($16,939).
ekathimerini.com , Wednesday Jan 30, 2013 (22:05)
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