Greece fact of the day

The combination of mass joblessness, wage cuts, and higher taxes means disposable household incomes have fallen even further. To make up the difference, Greeks have been eating into their savings. In 2006-2009, the personal savings rate averaged about 6 per cent. In 2015, the rate was -6 per cent.

The total amount of dis-saving since mid-2011 implies Greek households have eaten into €19bn worth of savings even as their living standards have cratered. For comparison, the financial accounts published by the Bank of Greece indicate €36bn in household bank deposits and cash, including deposits in non-Greek banks and foreign currency, disappeared over the same period…

Greek households have cut their investment spending even further, from about a fifth of disposable income in 2007 to just 2 per cent in 2015.

…Greece’s capital stock has been shrinking by about 6 to 7 per cent of output since 2012…

In other words, the collapse of Greece is worse than we had thought.  That is from Matthew C. Klein.


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