Updated at 14:58,21-10-2016

IMF has not understood the pre-election "generosity" of Belarusian authorities

01-10-2010, 21:52
IMF has not understood the pre-election

Present-day increase of minimum wage will demand increase of budget deficit.

A permanent representative of IMF in Belarus Natalia Kolyadina was not indifferent to the resolution of the Council of Ministers about the increase of the tariff rate of first discharge and the illegal decree of Alyaksandr Lukashenka about the establishment of minimum wage, AFN writes.

"We do not see economic grounds for such considerable increase of wage. Wages increase is to correspond with the increase in productivity... It is not clear to me, why there was such a substantial increase", - Kolyadina said in her interview to Reuters today.

Present-day increase is the most substantial for the recent years and, as the authorities estimated earlier, will demand additionally about 7 trillion Belarusian Rubles and increase of budget deficit up to 3,0% of GDP.

"Increase of wages will cause the rise of the domestic demand and rise of demand for imported goods and services... This means the widening the budget deficit and restructuring of budget expenditures... The government will need to generate revenues to fund the additional costs, but that will slow tax burden decline", - Kolyadina said.

"Within the program frameworks a certain increase of wages and pensions was stipulated. However, such a considerable increase, undoubtedly, does not correspond to our agreements", - she underlined.

Nevertheless, Belarusian authorities frankly forgot about their liabilities before the fund immediately after transferring the last tranche of IMF loan to the accounts of the National Bank of RB returning to habitual socialistic methods of economy administration. In this connection, the permanent representative of IMF should not now be obsessed with such narrow issues as increase of wages on the eve of the elections, but should seriously think about the future in a medium-term perspective. The talk is about the year of 2013, when Belarus according to the stated schedule is to start IMF loans repayment.

A regular mission of IMF will come to Belarus. It appears that the main topic of the meetings with representatives of Belarusian authorities is to be devoted to clarification of one principal moment – will the authorities remember in a few years about their liabilities of repaying loans.