Investment imports eat up potash exports growth
On April 1st, Statistics Ministry published foreign trade data in January-February 2013.
Industrial modernization and consumer imports growth neutralized the successes of potash exports and also became a major reason behind the international trade deterioration. In view of the planned concessional lending to industry and agriculture, further deterioration of the international trade situation should be anticipated, even if potash and dairy exports increase.
In February 2013, international trade in goods was negative: minus USD 237.7 million. In January 2013, international trade balance was minus USD 158.8 million. Compared to January-February 2012, the international trade balance deteriorated by USD 916.3 million. Taking into account the production “costs” of solvents, lubricants and biodiesel, trade surplus in 2012 improved due to innovative products by USD 200 million pm on average.
One of the few foreign trade positions in 2013, which could have a positive impact on net exports are potash fertilizers. Contracts, signed with China and India, resulted in a significant increase in potash exports volume and helped offsetting the reduced prices. In value terms, the supply of fertilizers (including the nitrogen fertilizers supply) grew by 38.4%, or by USD 132.2 million in January-February 2013 compared with same period in 2012. Potash exports in January-February 2013 have become the fastest growing exports in Belarus.
In 2013 international trade is suffering from the lack of innovative products, as well as from industrial modernization and consumer imports. In three major investment groups – goods, electrical machinery, vehicles and equipment – imports grew by over USD 420 million in January-February 2013, compared with January-February 2012. Food imports have increased by more than USD 100 million. Import of other commodities is also growing.
Thus, modernization plans and rising incomes have already had an impact on the foreign trade. International trade situation will continue deteriorating due to potential increases in lending at subsidized interest rates to industry and agriculture, even if potash fertilizers and dairy products exports increase.
The Labour and the Tax Ministries are considering the possibility to include persons engaged in some economic activity without forming a legal entity in the social security system. When the decree No 337 comes into effect, the number of private entrepreneurs is likely to reduce due to the possibility of reducing the tax burden when switching to a tax payment as an individual. 95% of self-employed, including PE, pay insurance premiums on the basis of the minimum wage. The number of self-employed citizens is expected to increase, the number of insurance contributions to the pension system from PE will decrease, the number of citizens who will pay a fee to finance government spending will decrease by several tens. Self-employed citizens have the alternative not to pay social security fees and save resources for future pensions, which, given the gradual restriction by the state of pension requirements could be a more long-sighted option.