Indices reveal financial suffocation of households
The public’s expectations regarding income, saving and property pricesMonday, 25 Nov 2013
Based on a telephone opinion survey, with a general population sample of 1,038 adults (18+) from across Greece. The survey was carried out: 1-6/11/2013.
The redistribution of income which has taken place over the past four years, in combination with the rapid increase in taxation during the same period, are vividly reflected in four indices that are used to measure the economic climate.
Both the index that tracks respondents’ assessments of their personal financial situation (household finances) in the past 12 months and the index depicting their expectations with regard to the likelihood of being able to save some amount of money in the coming 12 months point to an extremely negative economic climate. Specifically, 82% of citizens, 8 in 10, believe that their personal financial situation has deteriorated in the past year (figures 1 & 2).
At the same time, expectations for saving have vanished. Just 7% of respondents hope that they will manage to save some money in the coming 12 months (figures 3 & 4). But the financial suffocation of households can be seen even more clearly in the next index, which measures the use of savings in the past year. According to this index, only 9% of respondents, i.e. less than 1 in 10, have not been forced to dip into their savings, in order to meet their current obligations. In contrast, 72%, i.e. 7 in 10, have found it necessary to use the money they have put aside, something which also explains the ongoing decline of bank deposits. Another important point revealed by the same index is perhaps even more indicative of the financial exhaustion gradually enveloping a sizeable proportion of Greek households, namely the fact that 1 in 5 respondents (19%) spontaneously report that they no longer have any savings. Although no systematic time series is available for this index, the upward trend since 2009 is quite apparent (figures 5 & 6).
The gloomy picture painted by the income indices is further compounded by consumers’ expectations regarding the future course of property prices. This index, which is being used for the first time in the November measurement of Public Issue’s Economic Barometer, reveals that three-quarters of respondents (74%) expect a sizeable drop in property prices over the coming year. Thus, the majority of Greek households are aware of the threatened depreciation of the real estate at their disposal (figures 7 & 8).