Government’s adjustments to 2014 forecast may not be approved
On October 22nd socio -economic development forecast for 2014 was published.
International trade situation has led up to adjustments in the 2014 Belarus’ development forecast plan. Major indicators have been substantially lowered. However the president is unlikely to approve this realistic forecast and may order to set more ambitious goals for 2014. This would recreate the 2013 situation, when GDP growth forecast will not have been implemented.
Initially, the socio-economic development plan for 2014 assumed GDP growth at 5.7%. Inflation was projected at 11%. It was projected that the external demand for Belarusian goods would trigger economic growth up to 3.6% of GDP growth. However, due to changes in potash fertilizers exports and in supply of crude oil volumes, external economic factors needed to be readjusted. The latest version of the socio-economic development plan for 2014 assumes export of potash fertilizers at 5 million tons, against 7 million tons planned initially. Estimated volumes of oil supplies to Belarus were also adjusted downward.
Also, the most recent version assumes only 2.4 % GDP growth and higher inflation rate – 14.5 %. The average USD/BYR exchange rate has been revised upward to about BYR 9800 per USD. Growth of exports of goods and services has been decreased to 7.2 % (11.7% in 2013). Population’s real wage growth has been reduced from 6.0% to 4.0 % in 2014.
The latest version of the socio-economic development forecast for 2014 is feasible, but will not be approved. 2014 is the pre-election year, which means the country’s leaders need to demonstrate success of the Belarusian managerial and economic models against the background of the world crisis and the crisis in other countries. The updated plan is not ambitious and does not require pushing off the limits. However the president will almost certainly demand to readjust parameters upwards. The weak diversification of exports and the limited range of export goods, including distorted macroeconomic indicators restrict the economic growth at 1-2%. If indicators are adjusted upward, the economy will unbalance and a situation similar to 2011 might occur.
The Belarusian economy has a small chance not to be hit by the devaluation, which requires the political will to recognize the incapability of the economy to significant progress. The authorities have consistently denied the failures of the Belarus’ economic model, which may result in a new devaluation loop.
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.