A National Bank of Greece survey on the country’s economy has found its Gross Domestic Product will have declined by an astounding 25 percent in a five-period through the end of 2013 as the country’s deep recession continues.
One in every three private sector workers in Greece has found themselves out of a job since the start of the crisis, while salaries have gone down by 22% and are expected to shrink another 6% in 2013, the daily newspaper Kathimerini reported, citing data from the survey.
The unemployment rate has hit a record-high 25.1 percent and more than 68,000 businesses have closed since pay cuts, tax hikes and slashed pensions were imposed in 2010 – with another round coming under a $17.45 billion spending cut and tax hike plan pushed through the Parliament by Prime Minister Antonis Samaras. Making it worse for Greeks, while employment has declined sharply and salaries have been slashed, prices have not dropped to match the fall and will have come down only 5 percent during that period.
The study concludes that the economy’s reaction to the austerity measures was slow in the first year, 2010, and it was only in the following year that the results of the policy applied started to become apparent. Attributed to the front-loaded application of fiscal measures and the uncertainty over the country’s future course, the economic contraction is expected to add up to 21% by the end of this year (2.9% in 2009, 4.8% in 2010, 7.1% last year and 6.7% this year), with another 4.7% anticipated in 2013.
After a slow start in 2010, the adjustment of the labor market ”was exceptionally violent in 2011 and 2012,” according to the bank’s analysts, who estimate that over the course of just three years the unemployment rate has risen by about 16 percent, with total jobs lost exceeding 750,000, or more than 17% of the work force.
Crucially, given the near-zero layoffs in the broader public sector and the very low unemployment rate among the self-employed, the report concludes that ”the unemployment level among salary workers in the private sector stands at 33%,” and rising. During austerity, however, no public sector workers have been laid off or fired, although the government said it plans to get rid of 27,000 of them through the end of next year, on the order of international lenders.
(Source: ANSA)
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