Economic growth plateaus
How is the economy of Belarus progressing in comparison with its closest neighbours?
By Vyacheslav Livanov
Not long ago, economists argued that the recession seen through European markets was unlikely to ‘migrate’ to developing countries in the East, including within the CIS. They emphasised that fluctuations on developed markets would have no effect but it seems they were overly optimistic. If your neighbour sneezes, their cold will strike everyone eventually and, according to a recent report from the CIS Interstate Statistical Committee, that time may have come. The main macroeconomic indicators are slowing down across the region.
Figures show that, across the CIS, electricity production is falling, alongside manufactured volumes of rolled ferrous metal products, tractors, trucks and cars, and certain types of chemical and food products.
At the end of May 2013, compared to the same period of the previous year, CIS banks saw volumes of deposits and loans rise. Long-term loans dominate credit in all countries, except Tajikistan, while the share of overdue loan repayments in May 2013 only slightly exceeded the level from May 2012 in most countries. The situation on CIS foreign exchange markets by mid-2013 (compared to mid-2012) was characterised by a weakening of exchange rates against the US Dollar, the single European currency and the Russian Rouble.
Who makes the ‘record’?
GDP growth has been observed in all CIS countries except Ukraine, where GDP dropped by 1.1 percent in the first quarter. Turkmenistan’s economy grew most (9.4 percent) followed by Kyrgyzstan (7.9 percent).
The Ministry of Economy notes with regret that the major factor in GDP growth in Belarus has been domestic demand. It stresses that negative factors are gradually decreasing but warns of a worsening foreign trade position for domestic producers, since efforts to reduce warehouse stock will negatively impact GDP growth.