Household income nosedives in Q2

Greek households are suffering a major blow from the pandemic, as in the second quarter of the year alone, which included the lockdown, their collective disposable income went down by 3.9 billion euros, or by 11.8% compared to the same time last year.

Household income losses predictably brought about a drop in consumption, as reflected on the turnover of most economic sectors, from tourism and food service to entertainment and even retail commerce. The data of the Hellenic Statistical Authority (ELSTAT) coincide with the figures of the Bank of Greece about the increase in savings, which is related to reduced consumption due to the lockdown and the fear of a further recession.

The statistics ELSTAT published on Friday showed that households’ disposable income amounted in the second quarter to €28.96 billion, down from €32.83 billion in Q2 of 2019. A similar reduction was recorded in consumer expenditure by households, at €28.4 billion against €32.5 billion a year earlier., i.e. down 12.7%.

According to the same data, corporate turnover across the economy amounted to €58.9 billion in April-June 2020 against €78.8 billion last year, a reduction of 25.1%.

The biggest decline was in the sectors of food service and accommodation (78.8%) and of arts and entertainment (53.2%) on an annual basis. The ban on out-of-home entertainment, the restrictions on movement and the reduction of spontaneous shopping due to the shutdown of most brick-and-mortar shops for most of that period resulted in a rise in the bank deposits of Greek households.

ELSTAT figures show an increase in the savings rate of households to 1.9% in Q2 from 0.9% a year earlier. The increase in deposits started in spring and continued in the following months: In April 2020 they rose €1.5 billion, in May by €194 million and in June by €50 million, with the annual growth rate at 6-7% over those months. Bank of Greece data showed a further rise by €165 million or 2% year-on-year in August.