The welfare matrix

Belarusians began to earn and spend more

The economic performance of any state is assessed by a number of key parameters. Obviously, everyone has heard about a GDP indicator. Yet, there is one more equally important criterion — real disposable household income. The Head of State has emphasised that, despite external pressure, all measures are taken in the country to ensure the growth of salaries and pensions. After all, the basis of the policy pursued in the country is a person.

As they say, everything is learned in comparison. It is enough to turn to history and recall how much we earned in the early 1990-ies, and then look into the latest payroll sheet. Thus, the level of low-income households in Belarus has decreased almost 10 times compared with 1995 — from 38.4 to 3.9 percent. This is one of the lowest rates not only in the CIS, but also among the European Union countries. The real money income of Belarusian citizens has increased 8.5 times during this period, while actual earnings have increased more than 11 times. The real money income of the population increased by 6.1 percent over last January – November alone, compared to the same level in 2022. An increase in the average salary and pensions was ensured, as well. This was primarily facilitated by the measures aimed to support the economy, normalise the situation on the labour market, stabilise prices in the consumer market and reduce inflation. The country’s GDP at purchasing power parity per capita rose from 20.3 thousand dollars in ruble equivalent in 2020 to 25.2 thousand in 2023.
The logic is simple — stable economy and positive dynamics ensure higher salary growth and budget replenishment. This, in turn, directly affects the increase in pensions and other social transfers. The economic growth was balanced last year and achieved a higher level than initially planned. Along with that, three main tasks were solved — an outstripping growth in household incomes, low inflation and employment of the population.
In order to increase real wages, the base rate for employees of state-funded organisations was raised twice last year, according to Galina Korzh, Head of Department for Income and Living Standards Forecasts at the Economy 
Research Institute of the Ministry of Economy. “In addition, the salary level in industry was positively influenced by financial and economic activities of various organisations in the real sector — gross value added increased as well as profitability of sales. Another type of income for the population is pensions. They were raised twice last year, too. Property income is not an insignificant part of income, either. To a greater extent, we are talking about interest on deposits. Attractive conditions for storing deposits in national currency allowed citizens to get good additional income.”

What we spend money on

The growth in household income level has a positive effect on retail trade in the country. According to Belstat, every resident of Belarus spent an average of almost 23 rubles per day last year. In 2022, the average check was just a little over 20 rubles. In total, the one-day retail trade turnover in the republic also increased over the past year — it amounted to 76.4 billion rubles. This figure is 8.5 percent more than it was a year earlier.
Furthermore, Belarusians left 5+ billion rubles in cafes and restaurants last year.
What they began to spend less money on is buying foreign currency. According to the National Bank, the citizens of the country actively sold it last year. Thus, ‘green’ currency is going out of fashion, as the saying goes.

DIRECT SPEECH

Deputy Minister of Economy Andrei Kartun,
“The implementation of production and export programmes will ensure an increase in real disposable household income by 3.5 percent in 2024. There are two key directions here. In the real sector, it is planned to focus on low-wage enterprises. Its level must reach at least 85 percent of the industry average. 
Salary growth in the economy is planned to be at the level of 10–12 percent. Pension growth will be provided by almost 15 percent. The pension and salary ratio in January – November 2023 amounted to 37.5 percent. In the current year, we will strive to reach 38–39 percent, and by the end of the five-year period —
40 percent.”

TO THE POINT

The size of the minimum subsistence budget [MSB] has been increased since February. The average MSB per capita rose by 10.6 percent compared to its value established on November 1st, 2023, and amounted to 406.74 rubles. The growth of this social criterion is primarily due to a change in the qualitative composition of the minimum set of food products included in the subsistence minimum.

By Vladislav Sychevich