Greeks 40 percent poorer than in 2008

ATHENS Tue Oct 22, 2013 7:38am EDT

A woman checks her mobile phone as she walks past a statue at central Syntagma square in Athens July 3, 2013. REUTERS/Yorgos Karahalis

A woman checks her mobile phone as she walks past a statue at central Syntagma square in Athens July 3, 2013.

Credit: Reuters/Yorgos Karahalis

Related Topics

ATHENS (Reuters) - Greeks are on average almost 40 percent poorer than they were in 2008, data indicated, laying bare the impact of a brutal recession and austerity measures the government may be forced to extend into next year.

Gross disposable incomes fell 29.5 percent between the second quarters of 2008 and 2013, statistics service ELSTAT said on Tuesday. Adding in cumulative consumer price inflation over the same period takes the decline close to 40 percent.

Propped up by international aid since 2010, Greece is at loggerheads with its lenders from the European Union and International Monetary Fund over the size of its 2014 budget deficit.

The discrepancy has prompted talk that Athens - which has ruled out across-the-board cuts in wages or pensions - might have to adopt new austerity measures.

Spending cuts and tax hikes to meet the terms of its international bailouts, coupled with record unemployment, have eroded domestic consumption, which in Greece accounts for about three-quarters of gross domestic product, the biggest proportion of the 17 countries that share the euro.

Total workers' compensation has fallen 34 percent since the second quarter of 2009, the ELSTAT data showed. Over the same period, the government slashed social benefits by 26 percent.

The statistics service said the deep economic malaise also affected household savings rates, which fell 8.7 percent in the second quarter of 2013 versus a 6.7 percent drop a year earlier.

Based on EU/IMF projections, Greece's battered economy is expected to contract 4 percent this year before recovering modestly in 2014. This would bring the total GDP decline in 2008-2013 to 25 percent - making it the country's biggest peace-time recession.

(Reporting by George Georgiopoulos; Editing by John Stonestreet)

FILED UNDER: