Lower loan interest rates led to record number of outstanding loans
The National Bank reported that in July 2014 the economy’s debt to the banking sector (loans in national currency) increased by BYR 2.6 bln (circa EUR 189 million) – the largest debt since August 2013.
The debt has also accumulated due to the National Banks’ soft monetary policy. The National Bank is expected to further reduce rates in the economy, interest in currency loans will decline and banks will continue to lower interest rates on rouble deposits in the economy. The main risk is that the volume of outstanding loans will continue to increase rapidly, thus leading to liquidity problems in the banking system.
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.