In 2013 the economic growth will be attributable to domestic demand

Category status:
April 22, 2016 18:16


The Ministry of Economy’s plans for 2013 indicate that the old ways to accelerate the economic growth will be used. The risks of external markets shrinking and vague shapes of the ‘new’ economic policy imply that projected parameters may not be achieved.

Last week, the Ministry of Economy published a report by Economy Minister Nikolai Snopkov “Projected social and economic development of Belarus in 2013”.

The Ministry of Economy plans to base the Belarusian economic development until 2015 mainly on the growth in domestic demand. A detailed diagram of projected economic growth in 2013 by economy sectors shows that old methods, proven by time and repeated devaluations will apply to pump the GDP up. Growth of the added value in construction is projected at 8%.

Construction workers’ salary increases, used to retain workers, will impact on the cost of a square meter. Increased housing construction plans will require additional loans, mostly on preferential terms as the population cannot cover the construction costs from their own savings. In previous years this has resulted in the emission pumping of the economy and economic imbalances. The repetition of this scenario is highly probable. If there is a serious resistance to increasing of the preferential lending, this growth level will be unattainable.

Trade growth by 11% indicates a possible increase in incomes due to higher wages. This will impact on the growth of costs at industrial enterprises and the current trend (loss of traditional markets and even of some partners) may deteriorate due to the decreased competitiveness in foreign markets. Against the background of the possible crisis, even 3.7% export growth is questionable. The suspended solvent sales will not allow for the chemical industry’s growth up to 13% in the coming year.

The report is internally inconsistent: on the one hand, it points to a new high-tech sector, which will be created through FDI and on the other hand, it shows a downward trend in the share of high-tech products in all exports. Moreover, the business environment for investments in Belarus is even worse than the Customs Union partner countries. Given the way the existing business liberalization directives are implemented, optimism in this part seems overly ambitious.

Therefore the projected results are hardly achievable. The ‘traditional’ ways of pumping the economic growth carry the risk of 2009 and 2011 crisis recurrence against the background of the due high foreign debt repayments.


Similar articles

Minsk attempts to make up for image losses from military exercises by opening to Western values
October 02, 2017 11:49

The Belarusian authorities regard the Catholic conference as yet another international event to promote Minsk as a global negotiating platform. Minsk’s proposal to organise a meeting between the Roman-Catholic Church and the Russian Orthodox Church is rather an image-making undertaking than a serious intention. However, the authorities could somewhat extend the opportunities for the Roman-Catholic Church in Belarus due to developing contacts with the Catholic world.

Minsk is attempting to lay out a mosaic from various international religious, political and sportive events to shape a positive image of Belarus for promoting the Helsinki 2.0 idea.

Belarus’ invitation to the head of the Holy See for a meeting with the Patriarch of the Russian Orthodox Church should be regarded as a continuation of her foreign policy efforts in shaping Minsk’s peacekeeping image and enhancing Belarus’ international weight. The Belarusian authorities are aware that their initiative is unlikely to find supporters among the leadership of the Russian Orthodox Church in Moscow. In Russia, isolationist sentiments prevail.

In addition, for domestic audiences, the authorities make up for the lack of tangible economic growth with demonstrations of growth in Minsk’s authority at international level through providing a platform for religious, sportive and other dialogues.

Recent trends