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January 16 – January 22, 2017

Growth in net profits unlikely to improve situation with payments in Belarusian economy

The situation has not changed

According to the National Statistics Committee, in January-November 2016 the Belarusian economy’s net profit totalled BYN 4.7 billion, which was 21% more than in 2015. Net profit grew due to the absence of significant devaluation in 2016. Meanwhile, loss-making enterprises increased by 11%. Planned profits from the income tax are likely to be failed due to the insufficient profits at profitable enterprises, and layoffs in the industry are likely to persist, albeit at a slower rate as compared with 2015-2016. Investment opportunities of companies will depend on availability of own funds, private sector is likely to raise funds through issuing of public bonds in order to reduce loan costs. The situation with payments in the economy is unlikely to improve drastically due to the curtailed state funding of the loss-making state-owned enterprises. Banks are likely to restrict lending due to the growth in problem assets on banks’ balance sheets.

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