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 Labour and the Tax Ministries are considering the possibility to include persons engaged in some economic activity without forming a legal entity in the social security system. When the decree No 337 comes into effect, the number of private entrepreneurs is likely to reduce due to the possibility of reducing the tax burden when switching to a tax payment as an individual. 95% of self-employed, including PE, pay insurance premiums on the basis of the minimum wage. The number of self-employed citizens is expected to increase, the number of insurance contributions to the pension system from PE will decrease, the number of citizens who will pay a fee to finance government spending will decrease by several tens. Self-employed citizens have the alternative not to pay social security fees and save resources for future pensions, which, given the gradual restriction by the state of pension requirements could be a more long-sighted option.