Moderate wage growth will persist in Belarus despite reduced labour efficiency

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April 22, 2016 19:15

In May 2015, the average monthly wage in Belarus totalled USD 466 – an increase by USD 47.9 compared with January 2015. Wages grew despite the decline in labour efficiency in the Belarusian economy. Wage growth will continue due to the holiday season and mandatory payments for workers’ rehabilitation. Simultaneously, the demand for foreign currency will increase due to the need to acquire currency for recreation outside the country, and the increase in turnover in the retail trade will be negligible. Despite loss-making, state-owned enterprises are likely to receive state aid in order to pay wages to workers. Before elections, layoffs may affect pensioners only. 

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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.