Positive growth rates

Despite the unprecedented sanctions pressure, the Belarusian economy is showing growth: industrial production has increased, inflation has decreased,  while the population’s income has grown

Western officials have probably already lost count of the sanctions they have imposed against Belarus and Russia since 2020. They beat and beat, of course, on the most painful thing — on the economy: on the most sensitive export items, on the closure of traditional and convenient logistics routes... They hoped that they would strangle and bend over us. We won’t give them the satisfaction. Indeed, the negative effect of the sanctions is palpable, and especially in some respects. But the ability to reorient quickly and without buildup, rebuild and look for new ways of solution is not something we need: after all, sanctions were introduced for the first time not three years ago. Today we can confidently say that terrible scenarios have been avoided. And most importantly, ordinary people do not feel turbulence: incomes are growing, inflation is noticeably slowing down. The results of the work of the economy for the first half of the year were summed up last week in the government. The main conclusion is this: the Belarusian economy has reached positive growth rates.

Picked up a good pace

During a meeting of the Council of Ministers First Deputy Prime Minister Nikolai Snopkov stated that the economy has reached positive growth rates. He cited specific numbers to back it up, 

“Since March, the economy has reached positive growth rates. According to the results of the first half of the year, GDP grew by 2 percent, and in June — by 7.1 percent. 

In order to achieve the most important parameter of GDP growth by 3.8 percent in 2023, by decision of the government, the ministries, concerns and executive committees have set tasks that, when completed, ensure reaching the planned indicators.”
And now our readers can compare: according to preliminary estimates, the total GDP of the 20 eurozone countries in the last quarter grew by only 0.6 percent in annual terms, and by 0.3 percent in quarterly terms. Such data are provided by the European statistical agency Eurostat.
Commenting on the development of the socio-economic sector in the country on the air of the ‘Weekdays’ socio-political talk show on Alfa Radio, an analyst with the Belarusian Institute of Strategic Research (BISR) Aleksei Avdonin emphasises, “Belarus keeps a good balance between the money supply and the volume of goods and services. This balance allows us, first of all, to prevent the growth of inflation, as well as to ensure a real increase in wages, that is, not empty money printed and issued to the population, but precisely earned money. Unlike the West, our enterprises work both for the domestic market (there is an increase in consumption in our country) and for the foreign market. At the same time, we are exporting to Russia, the Asia-Pacific region, the Middle East, Africa, and Latin America.”

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Inflation slows down

The most sensitive point that ordinary people always pay attention to is the price level. The global economy is an economy, but your wallet is always closer. And here we have something to be proud of. In the first half of the year, inflation slowed down noticeably: the consumer price index grew by 3 percent by December 2022 against no more than 6.9 percent according to the government’s forecast.

“This contributes to real growth in wages and disposable money incomes. In five months, they increased by 3 percent in real terms. Accordingly, this stimulates the demand of the population for goods, as a result, retail trade is growing. In the first half of the year it grew by 4.6 percent,” Nikolai Snopkov announced the data. 

But in Europe everything is expensive...

Once again, let’s compare the data to well-fed Europe, where, according to Eurostat, the annual inflation rate in July was 5.3 percent. However, not everyone can boast even with such figures. Judge for yourself. 

The annual level of price growth in Latvia amounted to 6.4 percent, Lithuania — 7.4, Moldova — 13.2, Poland — 10.8, Czech Republic — 9.7, Sweden — 9.3, Estonia — 6.4 percent.

Michael/Ström Brokerage Analyst Bartosz Walecki, cited by expert.ru, emphasises, “There is no end in sight to the fight against inflation, as evidenced by the decisions of the central banks of all countries. Last month, decisions to raise rates were made by British bank BoE, Norwegian Norges Bank and RBA from Australia. These steps show uncertainty about the future level of inflation and doubt that it can be quickly curbed.”

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Production provides profit 

Another important fact that the First Deputy Prime Minister draws attention to is that industrial production for the first half of the year increased by 6 percent compared to the same period in 2022 and recovered to the level of the first half of 2021. At the same time, Nikolai Snopkov notes, “Industrial production growth is supported by strong external demand. The export of goods is growing. Export growth targets are met by most concerns and ministries. 

The growth in exports of goods is mainly due to exports to Russia and friendly countries with an increase of $5.6 billion. It is gratifying to note that we fully compensated for the decline in supplies to Ukraine and unfriendly countries.” 

Professor of the Institute for Advanced Studies and Retraining of Managers and Industry Specialists Industry Personnel Georgy Grits, comments on why the country has increased the output of many types of products many times over, “As people say, there would be no happiness, but misfortune helped. Part of the Western companies left the Belarusian and Russian markets. We began to actively fill the formed niche. 

Another aspect is import substitution. It’s no secret that the products of Belarusian enterprises had a lot of Western components. When their manufacturers refused to supply, we quickly reorganised, mastered the production of similar parts at our enterprises. As a result, the percentage of localisation has increased significantly.”

“In addition, there is growing optimism in the business community. For example, at the end of June, the difference between established and liquidated legal entities amounted to plus 279 organisations. This is 2.7 times more than a year earlier. In total, over 5.6 thousand new business entities were registered in Belarus in the first half of the year — a third more than in January–June 2022,” Georgy Grits analyses. 
And the most important thing is that structural changes are taking shape in the economy at an accelerated pace. There is an active import substitution in the manufacturing sector, a turn to the East. Export flows and investment cooperation are growing in friendly countries of Asia, Africa and the Middle East. And that means that with hard work, we can do it all. The main thing, as the President always says, is to get moving and everyone to do their own thing.

By Polina Konoga