Updated at 14:54,16-10-2020

Alexander Chubrik: We've already done that scenario


"If we try to put some goals in economic policy, better if it be the containment of inflation within 15% and coming to the pre-crisis level of incomes, than growth of inflation rate and falling incomes", the economist Alexander Chubrik said in an interview to UDF.BY.

That's how the expert commented on the demand voiced by Lukashenko on Feb. 9 to the Council of Ministers to prevent the growth of inflation above 15% in 2012. At the same time, the president says that one of the main government's tasks is an increase of Belarusians' incomes to the pre-crisis level.

"And if the salary is not increased at the expense of emission sources (the expansion of loan support programs, etc.), then there is no contradictions in these goals", Alexander Chubrik said. "The same Lukashenko said recently in a conversation with Ermakova, that no more money could be printed. This is a positive signal: even if the administrative mechanisms to be applied, then it won't be the additional currency issue, but the increase in tariff rates. Accordingly, enterprises will be forced to bind to its increase, and the main burden will fall on them".

According to the expert, "the problem is that we have already done that scenario before the elections in 2001, when after a rise of salaries enterprises had had financial problems, which led in 2002 to non-payment of wages, etc. This year we can get something similar, but only if the balance sheets of companies are not offloaded due to something else", the economist said. "For example, this year we have lower incoming prices for Russian gas. Accordingly, the costs for energy are lower and there is a potential to redistribute the expenses of companies from energy ones to the remuneration of labor. However, this is relevant only for the energy-intensive industries. But when the expenses to pay for energy are low, increasing the tariff rate can be painful".

At the same time Chubrik draws attention, that when one speaks of the pre-crisis level of incomes, then it's not the dollar incomes, but the ruble ones.

"This is the ruble incomes, just in real terms. If this year's inflation will be 20% (December to December), it means the average salary of 4,000,000 in December, i.e, December 2010 would be equal to December 2012 in purchasing power. It seems, almost none of the officials talked about exactly $500", said the economist, adding: "If we aim to reach the pre-crisis level and make structural reforms that will lead to increased labor productivity and competitiveness, if the salary increases follows labor productivity, then there is no inflationary pressure".