Government’s adjustments to 2014 forecast may not be approved

April 22, 2016 18:39

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.

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The Belarusian authorities have launched a discussion on the moratorium or abolition of the death penalty under the pressure of Belarusian human rights activists and international community. Apparently, the authorities are interested in monitoring public sentiments and response to the possible abolition of the capital punishment. The introduction of a moratorium on the death penalty would depend on the dynamics in Belarusian-European relations, efforts of the civil society organisations and Western capitals.

In Grodno last week, the possibility of abolishing the death penalty in Belarus or introducing a moratorium was discussed.

The Belarusian authorities are likely to continue to support the death penalty in Belarus. During his rule, President Lukashenka pardoned only one person, and courts sentenced to death more than 400 people since the early 1990s. Over the past year, Belarusian courts sentenced to death several persons and one person was executed.

There are no recent independent polls about people’s attitude about the death penalty in Belarus. Apparently, this issue is not a priority for the population. In many ways, public opinion about the abolition of the death penalty would depend on the tone of the state-owned media reports.

That said, the Belarusian Orthodox Church and the Roman-Catholic Church stand for the abolition of the capital punishment, however their efforts in this regard only limit to public statements about their stance. Simultaneously, the authorities could have influenced public opinion about the death penalty through a focused media campaign in the state media. As they did, for example, with the nuclear power plant construction in Astravets. Initially unpopular project of the NPP construction was broadly promoted in the state media, and eventually, according to independent pollsters, was accepted by most population.