Wages continue growing

April 22, 2016 17:59

A minimum wage in the country has been increased by 34%. Therefore an average monthly minimum wage in Belarus has been increased from Br 611 thousand to Br 730 thousand.

Comment

The country continues going down the spiral of “expenses – prices”. The Belarusian authorities have ignored the requirements set up by the IMF and Russia regarding the freezing of salaries, pensions and other budgetary sources of income. The Belarusian leadership continues to expect that creditors “will walk in its shoes” and is not yet ready to give full control over the situation to the law enforcement bodies in order to preserve stability.

However, prices rise and will continue rising outrunning indexing of incomes. 

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Raising minimum wage in regions to BYN 1000 by late 2019 could prompt devaluation
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The country's leadership has instructed the local authorities to raise minimum wages at enterprises by the end of 2019 to BYN 1,000, which would lead to an increase in the average wage in the economy as a whole to BYN 1 500. The pace of wage growth in 2017 is insufficient to ensure payroll at BYN 1000 by late 2017 without manipulating statistical indicators. In order to fulfil the president’s order, the government would have to increase budgetary expenditures on wages in healthcare and education, enterprises – to carry out further layoffs and expand the practice of taking loans to pay wages and restrict investment in modernisation of fixed assets. In 2010, the artificial increase in wages led to a threefold devaluation in 2011, an increase in the average salary to BYN 1500 will not match the capabilities of the economy and would lead to yet another devaluation.