Leanid Zlotnikau: Belarusians Forced To Spend More Than They Earn

Communal services, public transport and taxes “eat away” the last savings in the foreign currency.

Fixed-term foreign currency deposits of Belarusians decreased by $ 700 million as of January 1, 2017. Herein, this concerns not only the bank deposits, but also the savings of citizens. Economist Leanid Zlotnikau has commented upon this phenomenon to the charter97.org website.

— The people’s revenues are decreasing, and at the same time the part of expenses they spend on communal services, public transport and taxes seems to be growing. There is not enough money to maintain the life level the people are accustomed to. Different observers and analysts have noted this many times — this is a common opinion that the people are forced to spend more than they earn. So far, they have been accustomed to spend more, although their revenues fell.

— According to some experts, reduction of the population’s deposits can lead to the “investment depression” in the country. What does it mean?

— I would say there is nothing to fear. We already have this depression, even without the decrease of the population’s deposits. Even in 2014, the scope of investments into the country’s economy reduced, and it also fell by approximately 30% with regard to the main production funds. So, the population’s deposits will not facilitate investments, and amendments of these deposits will not attract any foreign investments in the Belarusian economy, as there have been none of them anyway. So, it doesn’t actually influence the investment process.

As previously reported, at the beginning of 2017 fixed-term foreign currency deposits of Belarusians reduced compared to the previous year by 9% - $ 6,99 billion against $ 7,7 billion. At the same time ruble deposits increased by 12%, taking into account the accrued interest, but did not grow in real terms. It appears noteworthy that not only the bank deposits decreased in 2016, but also the stocks that the people kept in other places, including their homes.