Greeks 40% poorer in 5 years, incomes down 30%

Greeks are on average almost 40% poorer than they were in 2008, data indicated, laying bare the impact of a brutal recession and austerity measures the government may be forced to extend into next year.

Gross disposable incomes fell 29.5% between the second quarters of 2008 and 2013, statistics service ELSTAT said on Tuesday. Adding in cumulative consumer price inflation over the same period takes the decline close to 40%.

Spending cuts and tax hikes to meet the terms of its international bailouts, coupled with record unemployment, have eroded domestic consumption, which in Greece accounts for about three-quarters of gross domestic product, the biggest proportion of the 17 countries that share the euro.

Total workers' compensation has fallen 34% since the second quarter of 2009, the ELSTAT data showed. Over the same period, the government slashed social benefits by 26%.

The statistics service said the deep economic malaise also affected household savings rates, which fell 8.7% in the second quarter of 2013 versus a 6.7% drop a year earlier.

Based on EU/IMF projections, Greece's battered economy is expected to contract 4% this year before recovering modestly in 2014. This would bring the total GDP decline in 2008-2013 to 25% – making it the country's biggest peace-time recession.