January GDP growth was due to refineries and production growth

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April 22, 2016 18:04

In industry the highest production growth rate was within refinery - 173.2% increase compared with January 2011. However February figures will not be the same, because such increase was associated with a low base effect, namely in January 2011 within the conditions of the conflict around Russian oil supplies, the Belarusian oil industry was almost idle (there were no deliveries, refineries processed the remnants).

In January Belarus’ GDP increased by 3.6%. Industrial production rate was 106.6 %, retail turnover - 103%. Capital investment decreased by 11.4%

In January experts predicted decrease in the GDP growth, the government expected 2% increase, respectively, on the one hand, the 3.6% growth in GDP is very positive. On the other hand, it is not enough against the projected average of 5-5.5%.

Moreover, January stock supplies increased to Br 16021.6 billion or 7.2% of the industrial output. Therefore, industry as one of the major components of the GDP (32.4%) has actually saved January by increased supplies and oil refinery.

Accordingly, in February, one should expect a decline or minimal growth due to the continuation of the stocking up of warehouses. In February there will be no factors affecting the growth of retail or foreign trade. Most industries are unable to ensure 5% growth of the GDP without loans or other forms of state support.

President Lukashenko’s and the government’s reaction to the macro-statistics in February will be crucial. It will be a litmus paper regarding the algorithm of further actions of the authorities. Most likely, at a Governmental meeting or a meeting at the Presidential Administration in March an order to start ‘heating’ up of the economy with money printing will be made (to support housing, agriculture, etc.).

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According to Belstat, in August 7,600 people were dismissed, including 4,800 civil servants. Dismissals of civil servants were due to the optimisation in the public administration by up to 30%. Some civil servants would retain their job however would lose the status of a civil servant. Vacancies on the labour market are likely to reduce in number, thanks to the optimisation, the state administration would increase wages for public servants. The payroll fund for retained employees is likely to increase and some former state employees are likely to get jobs in affiliated organizations. The optimisation of the state apparatus should complete by January 1st, 2018, and some former civil servants are likely to join the ranks of the unemployed.

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