SEV warns over low rate of savings in the country

Greek households’ average savings rate is at the lowest level in the country’s recent economic history, which combined with an increase in the share of private consumption as a percentage of GDP, means we spent 10.6 billion euros more than our incomes, the Federation of Hellenic Enterprises (SEV) said on Thursday.

In its weekly economic bulletin, SEV expressed its concern over the prospects of a sustainable economic growth “since without savings there cannot be any investments and without investments productivity and incomes won’t grow”.

“Households not only have stopped saving, but because of increased tax burdens, from taxes and social insurance contributions, either tax evade more or use accumulated savings, liquidating property or draining cash from deposits transfered abroad or within the domestic banking system. All these happen to the average household. The situation in poorer households must be more painful that average figures,” the Federation said, adding: “The phenomenon of tax evasion, amid high tax burden, is very difficult to be combatted if measures are not accompanied by reductions in tax rates. All those still consistent with their obligations, seeing tax evasion rising around them and social justice tumbling
down, they begin to question the correctness of their choices”.

SEV said in 2009, incomes totaled 221 billion euros, taxes were 13 billion and social insurance contributions were 34 billion euros, accounting for 5.9 pct and 15.4 pct of total incomes. In 2016, incomes totaled 154 billion euros, taxes were 11 billion euros and social insurance contributions were 28 billion euros, or 7.1 pct and 18.2 pct of total incomes.

The report said that total incomes dropped 30.3 pct in the 2009-2016 period, while available income fell 34.6 pct.