Greek overspending was curbed during the coronavirus lockdown. The severe lockdown imposed on Greece lead to a sharp increase in household deposits at a time of markedly lower economic activity.
Figures by the Bank of Greece and the European Central Bank showed that private deposits in Greece, in line with the rest of the Eurozone, increased at rates of 9.5 per cent and 10.3 per cent respectively in July. These were the highest deposit rates recorded domestically in the country in more than a decade.
Greek households and businesses increased their liquidity by increasing bank deposits.
The figures show a roughly uniform increase of deposits in absolute figures compared with a year earlier but the percentage increase was greater for businesses that had a significantly smaller share of total private deposits.
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Households increased their savings by six per cent, slightly less than the 7.4 per cent increase in the Eurozone.
Short-term deposit spikes were partly offset by a decrease in interest rates in Greece. To a great extent, households and businesses increased theri liquidity through an increase in bank deposits that can be quickly withdrawn. These can serve as a support to businesses and households in meeting their obligations to the state and banks that were suspended during lockdown to help increase their sense of security.
Greek businesses increased their deposits at an annual rate of 28.7 per cent in Greece. Loans to businesses have increased steadily, reaching 6.5 per cent on an annual basis in July, according to figures of the Bank of Greece. Businesses increased their short-term deposits by approximately 1.4 billion euros and their fixed-term deposits by 1.1 billion euros.
