Nezavisimaya Gazeta: Belarus waiting for devaluation

People will pay for the raised pensions and salaries after the “elections”.

Belarus increases pensions and other social payments today. The Minsk authorities were happy to report that the average wages in Minsk have exceeded the $500 level set by the president. The government, however, increases personal incomes with one hand, but take them out with the other hand. Belarusians are expecting the devaluation basing on the bitter experience of the previous wage growth ahead of elections. Experts assure no economic shocks will happen before the election, Nezavsimaya Gazeta writes.

Work pensions increase by 17% today that is caused by growth of wages in the country in comparison with the beginning of the last quarter of the year. The average pension will be $207. Minimum living wages will grow by 13.6% on August 1, which will result in the rise of social payments, for example child allowances. Women with children under 3 years old will receive $100.

The average wage in the country has not reached the level of $500 set by Alyaksandr Lukashenka. It's only $420 now. Only the capital authorities were able to boast the task was fulfilled – the average wage in Minsk exceeded the target figure.

But Belarusians are not as happy about the wage rise as it was ahead of the presidential election. The threefold ruble devaluation that ended with paper money emission is too fresh in the memory. Prices in shops and utility rates don't evoke positive emotions. Belarus was a leader in price growth among the CIS countries in June. Consumer prices went up 1.8% during one month. The price growth in Russia was 0.9%. The inflation rate reached 12% since the beginning of the year. The government plans the inflation rate should not surpass 22% at the end of the year. However, IMF experts forecast it will reach 34%. Local economic experts mostly agree with the opinion of their IMF colleagues. The biggest increase is expected in autumn. It is connected firstly with the beginning of the heating season and the growth of utility rates and secondly with the parliamentary elections scheduled for September 23. For the present, Belarusians are shocked by new tuition fees.

In accordance with new prices announced by universities, tuition fees for first-year students went up by 40-50%. This growth cannot be explained otherwise than by devaluation expectations, because the fees doubled even in the dollar equivalent. The average tuition fee will be $2,000 against $1,000 before last year's devaluation. “They may know something that we don't know,” Belarusians suggest waiting for autumn with anxiety.

By the way, the beginning of this week was marked with panic – a pro-opposition website published information with a reference to sources in the National Bank that a closed meeting in the country's central bank discussed the inevitable almost 100% devaluation if the average wage in the country increases to $500. A source says the dollar in Belarus will cost 15,000 rubles (a pessimistic scenario) or 12,000 rubles (an optimistic scenario) against 8,000 rubles today. According to the source, it was proposed to limit cash withdrawals operations and freeze deposits in banks.

Needless to say that the National Bank denies the very fact of holding such a meeting. “This information, including the figures, is someone's fantasy,” an official information agency quotes a National Bank representatives.

Belarusians and experts are not surprised with the forecast. Both local economists, IMF and World Bank experts warned the Belarusian government that the wage growth to $500 on this stage can lead to a new inflation surge and devaluation. However, even independent experts have optimistic forecasts. Stanislau Bahdankevich, a former head of the National Bank, thinks there will be no sharp devaluation in the country. “Maybe the dollar will cost 9,000 rubles...” he thinks. “The stock of money – increased wages and pensions – will be absorbed by consumer prices growth. Utility costs, prices of fuel and other goods will rise and absorb wages. The wages can be 500 dollars, but people may be poorer than having 370 dollars today,” he explains. Experts remind Belarus has the foreign trade surplus  and continues to receive oil and gas on privileged terms that guarantees the relative economic stability. Belarusians should not expect any shocks before the elections, all experts are confident. Ordinary citizens of the country have the same opinion anxiously waiting for the post-election period.