Cold weather in Belarus could interfere with plans to reduce inflation below 7% in 2017
The Economy Ministry has projected a decrease in annual inflation to 5% with a forecast of 9% for 2017. According to the results of Q1 2017, consumer prices increased by 3.4% and foodstuffs by 4.3%. When the Belarusian rouble depreciates, price for imported goods would increase and would restrain growth in household incomes. An increase in prices for Belarusian on foreign markets would lead to a gradual increase in prices on the domestic market, primarily dairy products. Unfavourable weather conditions, both in Russia and in Belarus, could have a negative impact on the yield of cereals and vegetables, which would lead to higher prices for these products and could derail the plans to reduce inflation, both in 2017 and in 2018.
The Labour and the Tax Ministries are considering the possibility to include persons engaged in some economic activity without forming a legal entity in the social security system. When the decree No 337 comes into effect, the number of private entrepreneurs is likely to reduce due to the possibility of reducing the tax burden when switching to a tax payment as an individual. 95% of self-employed, including PE, pay insurance premiums on the basis of the minimum wage. The number of self-employed citizens is expected to increase, the number of insurance contributions to the pension system from PE will decrease, the number of citizens who will pay a fee to finance government spending will decrease by several tens. Self-employed citizens have the alternative not to pay social security fees and save resources for future pensions, which, given the gradual restriction by the state of pension requirements could be a more long-sighted option.