Greek households had a 2.5% real increase in disposable income, in purchasing power units, in January-September 2024. The nominal increase was 5.6%. However, this was channeled entirely into consumption, while savings were negative, perpetuating one of the biggest problems of the Greek economy, with effects on investments, growth and the current account balance.
Overall, household disposable income increased to 119.4 billion euros in January-Septenber 2024, from €113.1 billion in the same period of 2023. Accordingly, consumption increased to €122.1 billion from €115.6 billion. Therefore savings remained in negative territory by €2.6 billion or (2.2% of disposable income), from -€2.5 billion a year earlier.
The relevant ELSTAT data were analyzed by Eurobank, which noted that “the negative savings of the institutional sector of households in Greece has been a structural problem of the economy for many years. The exception is the period of the pandemic; however, at that time the positive savings flow was more involuntary, due to the lockdowns, than voluntary. Negative household savings deprives domestic financing of investment resources, resulting in the economy partially resorting to external borrowing.” According to the data, the momentum of consumption is unwavering. In January-November 2024, it recorded a real increase of 2% on an annual basis and 5.6% at current prices, mainly thanks to the strengthening of household disposable income that is mainly the result of the increase in employees’ salaries.
That has contributed 4.3 percentage points to the 5.6% increase in nominal disposable income, as the compensation of employees increased from €55.4 billion in the first nine months of 2023 to €60.3 billion in the first nine months of 2024 – i.e. by 8.9%.
As the report points out, the increase in the compensation of employees mainly reflects the strengthening of compensation per employee by 7.7%, as employment, excluding the self-employed, increased by 1%.
