Housing and utility tariffs to go up to deter wage growth in Belarus

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August 28, 2017 12:47

According to the resolution of the Council of Ministers No 641 of August 24th, 2017, as of September 1st, 2017, prices for natural and liquefied gas will increase, as well as electricity and heating tariffs, which would lead to an 8% increase in public expenditure on utilities. The increase in prices and tariffs for housing and communal services is part of the strategy aiming to ensure 100% payment for utilities by the population in 2018. By the year-end, tariffs for sewerage, water supply and garbage disposal services will increase. A further change in the structure of expenditure in low-income households would be due to increased share of housing and communal services in consumer spending. Citizen complaints about poor quality of housing and communal services are likely to increase in number. Private business is unlikely to show any interest in expanding its presence in the communal sphere due to tight price regulation and the absence of equal business requirements. The state will continue to pursue 100% payment for housing and communal services by the population even though the talks with the IMF on a new loan programme have been suspended. Amid growth in wages, the increase in tariffs for housing and communal services would enable the state to withdraw some income from citizens, thereby reducing the pressure on the currency market. When the state achieves 100% payment for communal and housing services by the population, further increase in prices and tariffs would be justified by inflation and growth in labour costs.

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