Greeks Cutting Vacations Due to Financial Strain: The Shrinking Middle Class and Rising Income Inequality

Rising living costs and economic insecurity are significantly impacting Greek consumer habits, with vacations being one of the first areas to face cuts. According to research by IELKA and the European Foundation for the Improvement of Living and Working Conditions, the economic situation is prompting Greeks to reassess their priorities.

Vacation Cuts

Research by IELKA (Institute of Retail Consumer Goods Research) reveals that in 2024, one in two Greeks (55%) will not take a vacation due to rising prices and the increased cost of living. Of those who will take vacations, 32% will significantly limit them, while 60% of consumers will reduce their spending compared to last year, with 40% reporting cuts of over 50%.

The main reasons for these cuts are reduced disposable income due to price increases and higher costs for tickets (50%) and accommodation (48%).

Shrinking Middle Class and Income Inequality

Another study by the European Foundation for the Improvement of Living and Working Conditions shows that the middle class is shrinking in nearly two-thirds of EU member states, while income inequality is rising in half of Europe. In Greece, the middle class remains stable, but income levels are low, placing the country in the low-income category.

Changes in Consumer Habits

The IELKA survey also reveals that Greek consumers have reduced spending in many areas to cope with economic difficulties. 71% have canceled entertainment expenses such as dining out and travel, while 55% have cut back on food and grocery purchases.

Additionally, 27% of consumers have used savings to cover their purchases, while 16% have increased working hours or found a second job to boost their income.

Societal Impact

The increase in the proportion of people below the poverty line in many EU member states, including Greece, reflects the growing economic challenges facing households. These difficulties can be alleviated with targeted policies that address the unequal impact of rising prices.

Conclusions

The economic pressure on Greeks due to rising prices and the increased cost of living has significant effects on their consumer habits, with vacations being one of the first areas to be cut. The consistent reduction in disposable income and rising income inequality require effective policies to protect vulnerable social groups and ensure economic stability.