Belarusian economy abandons hopes for growth in 2016
According to the IMF forecast, Belarus’ GDP is expected to decline by 2.2% in 2016. The forecast for 2015 has been revised downwards – GDP is expected to shrink by 3.6% instead of 2.2% according to April forecast. The deterioration is due to the slower pace of economic recovery in the developing countries with a view to preserving the current level of oil prices. In the near future investment in fixed assets will curb, household incomes will continue to fall, competition for jobs will increase, and inflation somewhat decline due to lower consumer demand. The current account deficit of 4.3% of GDP requires a search for external funding sources to service the public debt, since Belarus does not have sufficient domestic resources to service her debt.
According to Belstat, in August 7,600 people were dismissed, including 4,800 civil servants. Dismissals of civil servants were due to the optimisation in the public administration by up to 30%. Some civil servants would retain their job however would lose the status of a civil servant. Vacancies on the labour market are likely to reduce in number, thanks to the optimisation, the state administration would increase wages for public servants. The payroll fund for retained employees is likely to increase and some former state employees are likely to get jobs in affiliated organizations. The optimisation of the state apparatus should complete by January 1st, 2018, and some former civil servants are likely to join the ranks of the unemployed.