Greeks now 40pc poorer than in 2008 as austerity bites
GREEKS are on average almost 40pc poorer than they were in 2008, data has 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 29.5pc between the second quarters of 2008 and 2013, Greek statistics service ELSTAT revealed yesterday.
Adding in cumulative consumer price inflation over the same period takes the decline close to 40pc.
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.
Total workers' compensation has fallen 34pc since the second quarter of 2009, the ELSTAT data showed. Over the same period, the government slashed social benefits by 26pc.
The statistics service said the deep economic malaise also affected household savings rates, which fell 8.7pc in the second quarter of 2013, versus a 6.7pc drop a year earlier.
Based on EU/IMF projections, Greece's battered economy is expected to contract 4pc this year, before recovering modestly in 2014.
This would bring the total GDP decline in 2008-2013 to 25pc – making it the country's biggest peacetime recession.