Lukashenka Drives Belarusians To Poverty

The people’s salaries are simply beggarly.

The economy of Belarus is allegedly growing, but the incomes of the population are falling. This is evidenced by the data of the Belstat for the first half of 2017. The expert explains the seeming contradiction.

According to the official statistics, a growth was recorded in Belarus in the first half of the year: the GDP grew by 0,9% and salaries increased by 2%. As for such indicator as real disposable money incomes of the population, in January-May 2017 they decreased by 1,2% in comparison with the same period of last year. Only in January, the real disposable money income of the population of the Republic of Belarus amounted to 95,5% to the level of January 2016.

Researcher of the Belarusian Economic Research and Educational Center (BEROC, Minsk) Dzmitry Kruk in an interview with the BDG explained that the contradiction in such statistics is only apparent. The main reason for the reduction in the income of the population, in the expert’s view, is the reduction in the yield of interest rates on deposits.

"The interest rates on deposits have significantly decreased over the past year. If earlier the interest rates in Belarusian rubles were in the range of 18-19% in nominal terms, and in real terms - 10-12% per annum, today it is 11-12% in nominal terms and 4-5% in real terms. The real yield from savings has significantly decreased. Since the profitability of this part has decreased, it affected all real incomes, " – Dzmitry Kruk said.

As explained in the Belstat, in the total volume of monetary incomes the payment for labor occupies 61,6%, incomes from entrepreneurial and other activities that generate income are 8,1%, transfers to the population (pensions, allowances, scholarships and other transfers to the population) are 24,7%, income from property and other income – 5,6%.

Thus, the reduction in deposit rates is only part of the story explaining the decline in the income of the population. At the same time, an anomaly is observed here. "Most of the sources grow roughly in proportion to the economic growth of the country's economy. But the share of income from savings - it is quite significant in the overall structure of the population's income. And this affects the total amount," - the expert explains.

Dzmitry Kruk summarizes: "Real incomes have decreased, but they are declining because last year the interest rates on deposits were too high. This year they reached a more adequate level. "

At the same time, the representative of BEROC agrees that regardless of the specific reason for the change in the indicators, the statistic shows "the real incomes of the population are declining - this means that the population continues to be poor."

The economist recalls that over the past three years the average household has lost up to 15% of its income. Due to this, savings of the population have decreased - people are trying to maintain their old consumption level at the expense of their former savings with new, decreased incomes.

The Belstat records income inequality in the regions of Belarus. Thus, in the Brest, Homel and Mahiliou regions, the highest share of the population with the level of average per capita disposable resources is below the subsistence minimum budget (8,7%, 8,1% and 7,6%, respectively). Now it makes up to Bn 18 382 (about EUR 81,68) on average per capita in Belarus.

The most well-off people live in Minsk. Here, the largest group (25,2%) receive revenues of more than Bn 600 (EUR 266,62) - the upper indice in the Belstat data. In the regions, the share of the population with such incomes is half that. The most common level of income in Belarus, received by 16,6% of the country's residents, is in the range of Bn 400-500 (EUR 177,75 – 222,18).

At the same time, Dzmitry Kruk also notes the inequality of incomes of the urban and rural population. It was the rural areas that suffered more - especially in the Homel and Mahiliou regions. According to the expert, "15% of the entire rural population is below the poverty line. This is very important. "