Greece: Economy measures cut the purchasing power by more than 5%

The essential cost-cutting measures of the Greek government have a direct impact on the consumers.

Due to the reduction of holiday allowances there are some heavy losses for employees and pensioners. Taking into consideration that a substantial amount of the private consumption was financed by loans in the past years, an additional decrease of the private consumption is expected. Thus RegioData calculates a reduction of the purchasing power per inhabitant by 5,7% for 2010. This equals a minus of more than 600 Euro per capita.

The retail sector expects a 5% decline in sales as well. Especially the turnover of long term goods, like electronics or DIY products or furniture will see a decrease. In times of crisis consumption expenditures for long term goods are loosing whilst those for food are increasing. Thus especially discount supermarkets could benefit from the crisis.

A recovery of the retail turnover is depending on the increase of the purchasing power and on the confidence in the economical recovery of the country. The way things are at the moment a recovery is unlikely to be expected before 2012.