Worsening of financial statistics in the real sector
By 1 May 2011 accounts payable amounted to Br 66.3 trillion, compared with 1 May 2010 they increased by 38.2%, while consumer prices grew by 18.1% during this period.
Between January and April 909 organizations were at a loss. Net losses of unprofitable organizations in January-April 2011 amounted to Br 1 trillion, or increased by 44.3% in January-April 2010.
As of 1 June 2011 stocks of finished products at industrial enterprises in Belarus amounted to Br 7578.6 billion, and increased by 51% from the beginning of the year.
Volume of stocks has been rising continuously since the beginning of the year: in May by 10.5%, by 2% in April, by 1.9% in March, by 7.9% in February and by 21.8% in January.
The real sector cannot stay away from the unfolding crisis. Further reduction in income, growth of loans interest rates, the need to pay back foreign currency loans, all these and other factors contribute to the increased debts and loss-making of enterprises.
Moreover, the government’s efforts to stabilize inflation by putting administrative constraints on prices will lead to even greater imbalances. Many of the industrial, energy companies used foreign currency loans within the framework of modernization programs. The impossibility of their service will rebound to the banks. In order to avoid bankruptcy the government subsidizes state-owned enterprises from the budget funds (which is currently difficult), as well as enhances overall redistributive processes.
All these measures are contrary to the requirements set by Russia and the IMF in their reform programmes.
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.