Enhance consumer lending could boost retail turnover by 1-2 percentage points
According to the National Bank, in May 2017 consumer debt on consumer loans increased by BYN 136 million or 7.2% and exceeded BYN 2 billion, which was the maximum increase in debt over the past few years. The increase in demand for consumer loans has occurred after the requirement for a mandatory certificate of income was lifted, which simplified the procedure for obtaining a consumer loan. In the future, more banks are likely to issue loans without income certificates, the competition on the consumer lending market is likely to increase. Loans are likely to be issued in the form of instalments without paying the initial instalment and lower interest rates in the economy would reduce the instalment costs for businesses and reduce possible overpayments for consumers. The growth in wages stepped up retail turnover by 0.3% in H1 2017. Easier access to consumer lending could lead to an increase in unplanned purchases and boost retail turnover by 1-2 percentage points by the end of 2017.
The country's leadership has instructed the local authorities to raise minimum wages at enterprises by the end of 2019 to BYN 1,000, which would lead to an increase in the average wage in the economy as a whole to BYN 1 500. The pace of wage growth in 2017 is insufficient to ensure payroll at BYN 1000 by late 2017 without manipulating statistical indicators. In order to fulfil the president’s order, the government would have to increase budgetary expenditures on wages in healthcare and education, enterprises – to carry out further layoffs and expand the practice of taking loans to pay wages and restrict investment in modernisation of fixed assets. In 2010, the artificial increase in wages led to a threefold devaluation in 2011, an increase in the average salary to BYN 1500 will not match the capabilities of the economy and would lead to yet another devaluation.