Lower loan interest rates led to record number of outstanding loans
The National Bank reported that in July 2014 the economy’s debt to the banking sector (loans in national currency) increased by BYR 2.6 bln (circa EUR 189 million) – the largest debt since August 2013.
The debt has also accumulated due to the National Banks’ soft monetary policy. The National Bank is expected to further reduce rates in the economy, interest in currency loans will decline and banks will continue to lower interest rates on rouble deposits in the economy. The main risk is that the volume of outstanding loans will continue to increase rapidly, thus leading to liquidity problems in the banking system.
The Labour and the Tax Ministries are considering the possibility to include persons engaged in some economic activity without forming a legal entity in the social security system. When the decree No 337 comes into effect, the number of private entrepreneurs is likely to reduce due to the possibility of reducing the tax burden when switching to a tax payment as an individual. 95% of self-employed, including PE, pay insurance premiums on the basis of the minimum wage. The number of self-employed citizens is expected to increase, the number of insurance contributions to the pension system from PE will decrease, the number of citizens who will pay a fee to finance government spending will decrease by several tens. Self-employed citizens have the alternative not to pay social security fees and save resources for future pensions, which, given the gradual restriction by the state of pension requirements could be a more long-sighted option.