Consumers in Greece are cutting back their spending
and half of Greeks are only purchase the “absolute necessities.” Data from the
Marketing Laboratory of Athens University Economics and business shows that
monthly household expenditure in Greece dropped from €310 in 2016 to €274 in 2016. The country manufacturing
sector is also experiencing contraction. Greece has the worst PMI performance
for manufacturing sector in Europe.
3 comments:
This article highlights some of the turmoil in Greece. As Kyi commented above, Greeks aren't spending, and unemployment is at 24%. A third bailout by the IMF is planned in the summer, Greece's debt is more than 100% of their GDP and banks are warning lenders not to lend to Greece because they won't be paid back. Greece has a huge trade deficit, even though their individual purchasing has decreased. An unexpected result of lower amounts of purchasing is that they are not importing at the same levels, which hurts other European nations like the UK. The UL exports 2.163 billion pounds to Greece.
It has been reported that if Germany were to impose any more potential cuts on Greece, it will lead to chaos. Greece needs to leave the EU. The Euro crisis could consequently escalate. Their economy needs to set an appropriate exchange rate that will boost its domestic market. One thing which can be agreed upon is that if the Greeks continue with the Euro, their economy could collapse.
This seems like it could be a perpetual cycle that influences the economic downturn. Hopefully Greece has policy to help stimulate economic spending and activity. It seems that German could play a pivotal role in potentially helping to strengthen the Euro in Greece. But this has been a controversial issue and it doesn't look like Greece will be recovering anytime soon.
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