Unemployment may twofold or even threefold in Belarus in 2016

During 2015 the number of unemployed in Belarus has increased by 19 100 people, making 1% of the economically active population. The unemployment has grown due to mass lay-offs in industry, construction and agriculture. If negative trends persist, including the possible termination of SMEs trading in light industry goods, the unemployment may threefold in 2016.

According to the National Statistics Committee, on January 1^st, 2016, 43 300 persons were registered as unemployed, accounting for 1% of the economically active population of Belarus. On January 1^st, 2015, the unemployment rate was 0.5%, while the number of unemployed was 24,200 people. In 2015, for the first time over the past few years, the number of unemployed exceeded the number of jobs offered by the Labour and Social Protection services. On January 1^st, 2016, there were 28700 vacancies against 33600 vacancies a year ago.

Labour market situation has changed mainly due to the overall economic recession. In 2015, industrial production fell, investment in construction decreased and the consumer market shrunk. Due to lay-offs in 2015, the number of laid-off exceeded the number of employed by 81,300 people, of which 52,500 – in industry. Given the lack of jobs, even low-paid jobs were on demand – in social sphere, education and healthcare. Virtually non-existent unemployment benefits – circa USD 10 per month and the requirement of mandatory community service to receive it, have significantly adjusted downward the real unemployment levels.

In 2016, industrial production will continue to decline so as there are no preconditions for improving the economic situation in the country. Housing construction will shrink due to insufficient number of sites for development. Reduced purchasing power will lead to a decrease in retail sales and the closure of a number of unprofitable stores. A significant part of SMEs have suspended their activity and will be unable to resume it due to confiscation of goods and penalties for the lack of supporting documents for the goods.

Amid shortage of vacancies on the labour market, unemployment rate is likely to grow. Taking into account the new requirement for length of service for old-age pensions, it will be harder for the young to find a job due to the increase in the number of working pensioners keeping their jobs in order to accumulate the required service record. Overall, in late 2016, 60 000 to 90 000 people may register as unemployed, which means a two-three fold increase in the unemployment rate as compared with early 2016.

In 2015, official unemployment doubled in Belarus. If negative economic trends persist, the unemployment rate in 2016 may threefold.