Tax Reform and Household Spending Deepen Inequality in Cyprus and Greece

A study by the Central Bank of Cyprus found that the recent tax reform disproportionately benefits high‑income earners. The richest 10 % of the population gains about €1,057 per year, while the poorest 10 % receives only €5, and roughly 40 % of households see no increase in disposable income. The reform’s upper tax brackets mainly aid the 4 % of taxpayers earning over €60,000, costing €242.8 million and slightly lowering the poverty risk rate.

In Greece, ELSTAT data for the first quarter of 2026 show that household disposable income rose 3.2 % to €39.13 billion, but final consumption grew 4.7 % to €40.4 billion. Savings turned more negative, falling from –1.8 % to –3.3 %, indicating families are spending beyond their earnings and depleting bank deposits. Despite improved investment and external balances, the gap between income and spending highlights growing financial strain for households.