GDP to continue to fall after completion of harvesting campaign in Belarus
In January-August 2015, GDP shrank by 3.5%, while in January-July – by 4%. The dynamics has improved thanks to the harvesting campaign, which was delayed compared with 2014. Until the end of the year, further economic slowdown should be expected due to falling incomes and deterioration in the wholesale trade, transport and industrial production. The state will continue to provide financial support to key industrial enterprises in order to preserve the employment rates (MAZ, MTZ, BelAZ, and Atlant). Demand for Belarusian produces on foreign markets is unlikely to increase due to a large share of Russia in trade turnover and preservation of sanctions against her. GDP may somewhat improve through the production of innovative products and focus on the EU market, however, unfavourable investment climate does not encourage new businesses to emerge at a good pace.
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.