Sberbank survey: Wage growth, increasing credit support of public sector creates risks for Belarus’ national currency rate, inflation
<p> MINSK, Jul 16 - PrimePress. Wage growth and increasing credit support of Belarus’ public sector create risks for the national currency rate and inflation, says the review of Sberbank’s Centre for Macroeconomic Research (CMR). </p> <p> </p> <p> The survey by Centre for Macroeconomic Research points out that real wages continue to grow in Belarus, which is associated with the instrument of income support in the public sector, implemented by the authorities. Since April 2020, wage growth in the public sector has no longer been linked to the growth of labour productivity. </p> <p> </p> <p> Sberbank experts also draw attention to the increase in financial support to the public sector, including by raising the limits of policy lending and debt restructuring with lower rates. “Such a policy has already led to significant problems in the past, while the accumulation of additional imbalances creates significant risks for the Belarusian ruble and inflation,” says the CMR survey. </p> <p> </p> <p> Such risks are exacerbated by the negative macroeconomic background, formed under the impact of the coronavirus pandemic, CMR experts say. In Jan-May 2020, the gross domestic product (GDP) of Belarus declined by 1.8% year on year. Moreover, the year-on-year pace of decline of the Belarusian economy, as estimated by Sberbank, is accelerating, and in May 2020, the GDP reduction was already 3.8% compared to the level of May 2019. End </p>
2020-07-17
Primepress
MINSK, Jul 16 - PrimePress. Wage growth and increasing credit support of Belarus’ public sector create risks for the national currency rate and inflation, says the review of Sberbank’s Centre for Macroeconomic Research (CMR).
The survey by Centre for Macroeconomic Research points out that real wages continue to grow in Belarus, which is associated with the instrument of income support in the public sector, implemented by the authorities. Since April 2020, wage growth in the public sector has no longer been linked to the growth of labour productivity.
Sberbank experts also draw attention to the increase in financial support to the public sector, including by raising the limits of policy lending and debt restructuring with lower rates. “Such a policy has already led to significant problems in the past, while the accumulation of additional imbalances creates significant risks for the Belarusian ruble and inflation,” says the CMR survey.
Such risks are exacerbated by the negative macroeconomic background, formed under the impact of the coronavirus pandemic, CMR experts say. In Jan-May 2020, the gross domestic product (GDP) of Belarus declined by 1.8% year on year. Moreover, the year-on-year pace of decline of the Belarusian economy, as estimated by Sberbank, is accelerating, and in May 2020, the GDP reduction was already 3.8% compared to the level of May 2019. End