State support may temporarily improve financial performance of some enterprises

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April 22, 2016 19:28

In late July 2015, MAZ reported a net profit for the first time after continuous losses since early 2015. Its financial performance has improved mainly due to the support from the state (circa BYR 1 tillion). Otherwise, it would have reported losses again. Other large enterprises may fiddle with their factual financial performance data. The state funds will be spent on expansion of production and salaries. Amid growing budget deficit, minor budget items may be subjected to sequestration. Industry employment rates may somewhat improve. The authorities may seek to improve the state budget situation by increasing the burden on profitable enterprises and by making audit and inspections at enterprises more frequent.

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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.