Discount rate will drop to 11% in 2017
As of April 19th, 2017, the National Bank will reduce the discount rate from 15% to 14% due to a slowdown in inflation. In 2017, the discount rate reduction occurred every month by 1 percentage point. That said, by the year-end, the discount rate was projected at 14%-16%. Interest rates on loans for private persons and corporations are likely to continue to reduce, so as profitability of deposits in both, national and foreign currency. However, demand for loans is unlikely to step up due to persisting fears among banks to accumulate bad debts on loans and the lack of sufficient number of quality borrowers in the economy. If the current trend persists, and due to the industry’s pressure on the government to reduce loan burden on enterprises, the discount rate is likely to continue to reduce and may fall to 11% by the year-end.
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.