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.

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