Growth in industrial production in Belarus will be insufficient to overcome economic downturn in 2017
According to the National Statistics Committee, in January 2017 Belarus' GDP contracted by 0.5% despite industrial production growth by 5.9%. Industry accounts for 25% of Belarus' GDP. GDP contracted due to the negative dynamics in the construction, wholesale and retail trade. Positive dynamic is likely to persist in most types of industrial production, except petroleum refining. Wages are likely to grow compared with the same period in 2016. In order to overcome the downturn in the construction industry, volumes of soft loans may be revised upwards. Amid increased demand for products in some industrial sectors, layoffs may stop. High rate of industrial production is only possible if Russia resumes full oil supplies. Overcoming the economic recession without improving the situation in the construction industry and substantially improving people’s wages, is hardly possible.
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.