How Officials Lead Us Round The Circle Which May End In Devaluation

The economist has explained why he meets the year 2019 with a sense of anxiety.

The debt of the population of Belarus to banks for incomplete 2018, from January to November, increased by 26% - and reached 5.2 billion dollars in the equivalent. Does it threaten the stability of the Belarusian economy in 2019?

“Our consumer lending volumes are booming for the second year already,” Barys Zhaliba, Ph.D. in economics, said in an express comment for Solidarity. “This is due to the recovery of the Belarusian economy, which began after the crisis. There is also a factor of artificially boosting the incomes of the population - again we are going round the same circle as shortly before the 2011 devaluation.”

According to the economist, with such methods the authorities want “to increase demand to accelerate the growth of GDP.” And this is done also by increasing consumer lending.

“This rapid growth in loans poses potential risks. There is a possibility of late payment of debts, along with interest, by the debtors. And this happens quite often: people lose a source of income - and declare to the bank that they cannot repay the loan.”

If such cases occur massively, it may threaten the stability of the entire banking system, the source said.

“So far, the share of overdue and non-performing loans of the population is insignificant - about 2%. But the situation can change very quickly, as soon as something critical happens in the economy.

For example, we do not even know the results of the negotiations between Lukashenka and Putin. And this can lead to a significant decrease in incomes of the population. And then the share of non-performing loans can be explosive. This has already happened in our practice,” the economist warns.

According to Barys Zhaliba, the situation in the economy in 2019 will be decisive for those Belarusians who owe money to banks:

“What is happening in our economy remains difficult to predict by 100%. I think that the whole new year will be marked by uncertainty. The agreements that were reached in Moscow are unknown to us - and this is alarming. And if Belarus loses, as a result of the Russian tax maneuver, the $ 383 million as estimated, it will be sensitive for all of us.

Personally, I meet this year with a feeling of alarm: we will definitely fail to achieve the same confident economic growth that is observed in our neighbors - in Poland, Lithuania, Latvia, without economic reforms.