More than half the money households and businesses owe to the state, banks and servicers is overdue.
Of the €420.9 billion of total private debt, €238.6 billion – an amount that approaches the size of the country’s annual GDP – concern debts that are not being serviced properly.
Besides the size of the overdue debt, it remains at the same high level as in 2018, just over €238 billion. That fact is also striking. It remains so high despite a multiyear period of growth from the Greek economy, a significant increase in employment and a de-escalation of unemployment to single-digit rates.
Overdue private debt as a percentage of total private debt has shown a decrease of more than 14 percentage points since 2018, to 56.7%, thanks to credit expansion and GDP growth, but the fact that one in two Greeks among the active population has overdue debts seriously harms the economy.
As the IMF points out, the persistently high debt level is one of the outstanding issues of the multiyear economic crisis, with the consolidation of the private sector’s balance sheets remaining incomplete. The slow debt reduction, as the IMF emphasizes in a recent report, “also limits the possibility of returning to bank financing for businesses and households that are still burdened with nonperforming debts.”
