Country Report Belarus December 1998 Main report

Economy: Dollar becomes the currency of choice --

The dollar had already replaced the rouble as the standard unit of account in transactions involving imported goods or large-ticket items (cars, home electronics, household appliances, etc). Despite still being illegal, it has now also become the currency of choice for domestic, large-sum, cash transactions between private companies and between individuals. Tacitly recognising the failure of current policy and desperate for foreign currency, the government will soon partly legalise these transactions and open stores selling imported goods for foreign currency. According to official sources, foreign currency (mostly dollars) accounted for approximately 27% of the total money supply in Belarus as of October 1st, with actual figures probably even higher.

-- and real wages fall

Data provided by the Belarus Economic Trends index of real wages and pensions indicates that both declined in August from their July levels. According to press reports, August levels of BRb4.4m ($62 at current rates) for average real wages and BRb1.7m ($24) for average monthly pensions present a decline of 1.4% for wages and 3.8% for pensions. The government appears intent on minimising the effect of rising inflation, although it is unlikely to stem successfully the decline in real values caused by accelerating inflation. In August the government decreed an increase of the minimum wage by 40% with effect from October 1st, while it has recently indicated its intent to raise nominal wage and pension levels again in December.

Monthly wages and pensions (average; BRb '000 unless otherwise indicated) Real wage Total Real pension index wage index Nominal (Dec 1993 Minimum arrears Nominal (Dec 1993 wage =100) wage (BRb bn) pension =100) 1997 Jan 1,526.2 76.2 130.0 479.8 597.1 88.4 Feb 1,639.6 76.8 130.0 595.2 705.9 98.0 Mar 1,732.5 79.4 130.0 596.8 712.3 96.7 Apr 1,898.7 83.4 150.0 439.7 718.4 93.5 May 2,003.4 83.8 150.0 559.9 718.4 89.1 Jun 2,187.9 87.6 150.0 660.2 857.2 101.7 Jul 2,299.3 90.8 150.0 502.8 857.2 100.3 Aug 2,361.1 92.3 150.0 598.7 980.6 113.6 Sep 2,664.1 99.2 200.0 632.3 1,002.3 110.6 Oct 2,748.3 99.1 200.0 738.4 1,002.3 107.1 Nov 2,743.5 97.2 200.0 498.3 1,204.4 126.5 Dec 3,276.0 113.5 200.0 748.6 1,204.3 123.6 1998 Jan 3,024.2 100.8 250.0 797.5 1,238.2 122.3 Feb 3,390.0 109.6 250.0 803.8 1,475.3 141.4 Mar 3,698.2 115.8 250.0 722.8 1,475.3 136.8 Apr 3,669.3 110.6 250.0 948.3 1,475.3 131.8 May 3,854.9 112.4 250.0 1,081.7 1,475.3 127.5 Jun 4,176.8 118.6 250.0 1,312.9 1,475.3 124.1 Jul 4,348.2 120.1 250.0 758.7 1,721.2 140.2 Aug 4,449.0 118.4 250.0 1,068.6 1,721.2 135.7 Source: Belarus Economic Trends.

© 1998 The Economist lntelligence Unit Ltd. All rights reserved
Whilst every effort has been taken to verify the accuracy of this information, The Economist lntelligence Unit Ltd. cannot accept any responsibility or liability for reliance by any person on this information
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