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The price of the Russian loan Belarusians will feel on your wallet

Цену российского кредита белорусы почувствуют на своем кошельке

Belarus negotiates with Russia the details of getting the loan that Minsk will list the Eurasia Foundation stabilization and development. According to BelaPAN, the package of conditions imposed credit program, involves unpopular measures: the restriction of growth of salaries, increase of tariffs for paid services, the liberalization of prices.

Fee for a new loan

The program, under which Belarus will receive from the Eurasian Fund of stabilization and development of a new loan, will be extended for 2016-2017. Today, the Finance ministries of Belarus and Russia agree on the final terms of the loan.

According to experts, if the Belarusian authorities will be able to quickly align with all of the nuances, the first tranche of the loan can arrive in Minsk in the first quarter.

What commitments will have to take Belarus to the Eurasian get a loan for 2 billion dollars? It comes with several conditions.

According to BelaPAN, the terms of the loan provide for the limitation of wage growth in Belarus.

In particular, it is expected that in 2016 the expenditure budget for salaries will increase by no more than the planned level of inflation — 12%. A similar condition applies to 2017, when inflation is expected to reach 9%, respectively, on the magnitude of the Belarusian authorities will be able to increase public spending on salaries.

The second condition that must be fulfill for the loan, refers to paid services rendered to population.

According to BelaPAN, it is about what the level of reimbursement by the population cost of housing and communal services will grow to 50% in 2016 (versus 30% in 2015). At the end of 2017, it is expected that the population will cover 70% of the cost of utility services.

Similar changes are planned in regard to transport. It is expected that by the end of 2016, the population will cover 65% of the cost of such services (versus 60% in 2015) and 70% to offset the cost of travel on public transport at the end of 2017.

Finally, another condition associated with price liberalization. As you know, the prices of socially significant goods the state has already released in the beginning of this year, it is now for services. According to BelaPAN, the Eurasian credit abolished in Belarus, state regulation of the cost of postal services.

No new loans will be bad

In General, pleasant for Belarusians in the above measures is small, let’s face it — no cause for rejoicing. Sad: bearing liabilities to creditors regarding tariff policy, the authorities still have not given a clear answer to the population, what is the real cost of paid services.

“The events of recent months have revealed the complete mess that is happening at the state level in determining the cost of housing and communal services. It seems that no one really knows what is the real cost of these services and what their part is now paying the population”, — says the observations of a senior analyst “Alpari” Vadzim Iasub.

To the attention of the creditors the Belarusian authorities have brought in 2015 the rates of the population compensated for about 30% of the cost of utility services. Presidential decree No. 78, which was signed in February, suggests that in 2016 at the expense of optimization of expenses of housing organizations the population will reimburse 50% of the cost of housing and communal services.

When the decree is reported no later than October 1, must be introduced the system of non-cash housing subsidies that will be provided to poor people to offset part of the cost of housing services.

“The planned introduction of cashless housing subsidies indicates that the tariffs for housing and communal services will rise. Accordingly, we expect that the cost of Belarusian families, the cost of fattening, will grow”, — said Vadzim Iasub.

The creditor regarding the limitation of growth of nominal wages, experts believe preventive measure.

“This insurance creditors from the repetition of practice 2013-2014, when the income growth in Belarus has stimulated artificially” — said the expert of the Belarusian economic research and education center Dmitry Kruk.

Belarusian economists agree that the restrictive state policy in the sphere of wages, coupled with higher tariffs for paid services will lead to lower welfare.

However, experts stress that if Belarus will not be able to attract new foreign currency loans, the consequences, including for the population, may be even more painful.

“Unless we get outside funding, will have to pay its foreign debts at the expense of foreign exchange reserves and the reduction of budget expenditures. This path will lead to the exhaustion of reserves and the redirection of social expenditures of the budget for payment of the debts”, — concluded Dmitry Kruk.

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