Wednesday, 31 August 2016

Are Greek retail sales greying at an alarming rate ?

If one bothers to look closely at DG ECFIN's business surveys he/she might be able to make out an interesting divergence that's been building since the start of 2016. Namely, the divergence between ELSTAT's retail trade volume index and DG ECFIN's retail trade business activity development series.

source: ELSTAT, DG ECFIN, own calculations

The only explanation my linear thinking mind can come up with is that an increasing part of Greece's retail sales is going underground.

One fact though that is mightily puzzling (and not really consistent with the chart above) is that government receipts from value added taxes are doing rather well at the same time.

source: Hellenic Ministry of Finance

Now if you're wondering how is it possible for value added taxes receipts to do well when official retail sales are plummeting, I'm afraid I don't have any explanation ready to offer.

P.S. I wouldn't pay much attention to the parabolic rise of receipts in June (and to a lesser degree, May) since this is compared to June 2015, which was bang in the middle of the Greek government's debacle with our creditors and people were kind of reticent to pay their taxes at this particular moment.

Monday, 29 August 2016

Greek GDP - Q2 2016 update

╬čfficial figures for Greece's Q2 2016 GDP were announced today. The Greek economy contracted by 0,95% compared to Q2 2015. Here's the official announcement

source: ELSTAT

The only GDP component that grew when compared with Q2 2015 was Gross Capital Formation.

source: ELSTAT

If we try to analyze GDP's components, the ones preventing a larger GDP decrease were Gross Capital Formation and Imports (which continued to slide).

source: ELSTAT, own calculations

One has to remark on the household final consumption's accelerating slide and on the continued slump in exports, a slump that started since the imposition of capital controls.

To wrap this up, Greek GDP continues its stay in no man's land with the tax-raising policy picked by the government not bearing much fruit and seemingly pushing an increasing part of the economy in the grey area.