Utility payments may exceed 10% in consumer spending by late 2016 in Belarus

According to the plan aiming at gradually cutting subsidies to the population for communal and utility services, by late 2016 the state should subsidise only 50% of such costs. In 2015, the state subsidised circa 65-70%, and utility payments made about 6% in the structure of consumer spending. If utility services’ costs continue to grow and wages remain at their current level, the share of housing and communal services in consumer spending is likely to rise to 10% and higher. Consequently, the share of other services and non-food costs will decrease and retail sales will shrink. People are likely to file more complaints about the quality of services provided, including in the courts. In addition, arrears for utility services are likely to grow. While utility tariffs for the population will grow, the tariffs for legal entities will remain unchanged. The state is likely to use the unspent on supporting loss-making enterprises and repaying the public debt.