Effective from September 1st, a rise in the base rate is set to occur within Belarus.
In a significant move, the Belarusian government has announced an increase in the base rate for wage payments in the budget sector, raising it from 270 rubles to 273 rubles, effective September 1, 2025. This decision, signed by the Prime Minister, Alexander Turchin, marks the second base rate increase this year.
The base rate is a crucial indicator used to calculate the wages of budget workers and certain subsidized organizations. The most immediate impact will be felt by over 800,000 workers in the budget sector, who will see a slight increase in their take-home pay.
However, the ripple effects of this wage base increase extend beyond the public sector. The rise in nominal wages and associated increase in average salaries (up 18.8% year-on-year in the first half of 2025) and real wages (+11.8%) may lead to slightly greater repayment capacity for consumers.
Financial Products Impacted:
- Consumer Loans, Auto Loans, and Mortgages: With increased borrowing capacity, consumers may demand more credit. However, inflation pressures, estimated between 5.5% to 8%, may lead banks and lenders to increase interest rates on loans to offset real risk, potentially raising borrowing costs.
- Deposits: Higher nominal wages may encourage more savings, benefiting deposits. But with inflation accelerating, real returns on deposits may decline unless interest rates on deposit products rise correspondingly, which depends on monetary policy adjustments.
- Loans and Credit Cards: Similar to consumer loans, credit products could see increased demand from wage growth, but lenders might raise interest rates or fees to balance inflation effects. Rising costs can partially offset the benefit of higher wage bases.
- RKO (settlement and cash services) products: Increased economic activity with higher wages may increase transaction volumes and fees related to settlement and cash handling services.
- Leasing Services (new cars, used cars, business cars): Higher wages can boost demand for leasing vehicles, but inflation and potential interest rate hikes may raise leasing costs. Businesses and consumers might face higher leasing payments reflecting inflation and financing cost increases.
In summary, the wage base increase in Belarus is pushing nominal wages higher, which can improve consumer purchasing power and loan repayment ability. Simultaneously, rising inflation and potential monetary tightening could increase interest rates and costs on loans, credit, and leasing products. Deposit returns may improve if financial institutions raise rates to compensate for inflation, but real returns risk being lower. The net effect is a complex interaction of increased nominal wage income versus higher inflation and interest expenses influencing all listed financial products.
The average annual base rate in 2025 is expected to increase by 8%, making this a significant step in the Belarusian economy. The base rate was increased by 6.7% on January 1, with the increase from September being 3 rubles. This marks the second increase in the base rate this year, with the first increase in January raising the base rate by 17 rubles (+6.7%).
The rise in nominal wages due to the base rate increase may lead to an increase in demand for various financial products such as consumer loans, auto loans, mortgages, deposits, loans and credit cards, RKO products, and leasing services. Conversely, elevated inflation and potential monetary tightening could increase interest rates and costs on these financial products, potentially offsetting any benefits from higher wage bases. In business terms, this wage base increase has the potential to influence all sectors of the Belarusian economy, affecting both consumers and businesses. Furthermore, the anticipation of an 8% increase in the average annual base rate in 2025 signifies a significant shift in the nation's financial landscape.
