National Bank will not enforce discount rate reduction
By late 2017, provided inflation is low and a balance of payments is stable, the discount rate could be reduced to 14-16% per annum. The key task set by the National Bank for 2016, i.e. to reduce inflation to 12% was achieved and as of January 18th, 2017, the discount rate was reduced to 17%. The current monetary policy is likely to continue due to fears of further growth in bad debts in the banking system. A further reduction in rates in the economy is likely to be carried out by reducing the banks' margin. The banks are likely to increase the number of claims in courts requesting the arrest of collateral from troubled enterprises and putting it on sale. Bankruptcies are likely to increase in number among enterprises of different ownership forms. Amid high interest rates on loans, the only option for enterprises to raise funds would be to issue own bonds in national and foreign currency offering higher profitability compared with bank deposits.
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.