Falling incomes of population curb inflation in Belarus
According to the National Statistics Committee, inflation in Belarus was 9.2% in January - October 2016, which means that if the dynamics persists, the annual inflation target at 12% is likely to be achieved in Belarus. The main factor, which helped to curb inflation, was falling incomes of the population - by 7.1%. In order to maintain the standard of living, households sold USD 1.6 billion on a net basis. Further increases in utility costs will outpace income growth, and the BYN exchange rate would not fluctuate significantly (given there are no significant changes in the regional environment) due to the net currency supply by the population. Retail trade turnover is likely to fall short of 2015 in comparable prices. In addition, retail outlets are likely to reduce in number, so as the average ticket in the shops in dollar terms. In the next two-three months, the National Bank is likely to continue to reduce interest rates in the economy, which would be justified amid the low inflation rate in Belarus.
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.