Moving along the steady growth trajectory

Household incomes are growing while inflation is decreasing — positive trends prevail in the Belarusian economy

Last October, the President approved the most important forecast parameters for the country’s development in 2024. The main goal is to ensure the sustainability of the economy and an increase in the welfare of the population. The gross domestic product is projected to grow by 3.8 percent due to large-scale investment and production programmes, the sale of Belarusian products to foreign markets and the expansion of domestic demand. As for inflation, it is not expected to exceed 6 percent. Real salary growth is anticipated, as well. The results of the work over the first two months have shown that there are all prerequisites to reach the benchmark set.

The dynamics are positive

Despite all the forecasts of skeptics, the domestic economy continues to develop dynamically. According to the statistics, following the results of work in January — February 2024, positive trends prevail. One striking figure — Belarus’ GDP has grown by 4 percent. This is even a higher rate than the one recorded last year, and higher than the forecast within the target plan. 
“The growth drivers have changed a little,” noted First Deputy Minister of Economy Andrei Kartun. “Two drivers remained the same, though — they are industry and trade. Agriculture has become the third driver now. Agricultural production has increased by 6.9 percent. This growth rate has been achieved due to crop production, as greenhouse businesses got actively involved in it in winter. Greenhouse production has risen by 2.2 times compared to the same period in 2023. This is not typical for us. Our greenhouse fund has expanded; we have begun to grow more crops that are traditionally found on the tables of Belarusians — tomatoes, cucumbers, greens. There used to be technological breaks, but now we have started to work all year round, and this factor has played a major role. Animal husbandry is also showing growth. Thus, agriculture, strange as it might seem, has become one of the leaders in terms of contribution to GDP growth in winter.” 
As for industry, the growth rate is 107.1 percent. Compared to January, it has accelerated. The leaders are mechanical engineering products, the production of cars and buses. Retail trade has increased by 12.6 percent; wholesale trade is growing, too. The transport industry is actively recovering — while last year it recorded a minus, now it has marked an increase of more than 4 percent. 
“Moreover, it demonstrates growth both in cargo and passenger turnover,” emphasised Andrei Kartun. 

Prices are under control

It goes without saying that the crucial indicator of the economy is household income and the price situation. A positive trend is observed here, as well. The real disposable income of the population has grown by 5.1 percent in January 2024 compared to January last year. The nominal accrued average salary of Belarusian employees in January was 1991.2 BYN. In addition, labour pensions have increased since February. Inflation, on the contrary, has slowed down. 
“Annual inflation has slowed down in Belarus, including due to low price growth for fruit and vegetable products. This is related to the fact that the market has increased the supply of Belarusian-made products. In two months, inflation amounted to 1.7 percent. We had predicted a higher figure,” the First Deputy Minister of Economy pointed out.

External contour 

As for foreign trade, the growth rate of exports of goods and services has not yet gained the desired momentum. Nevertheless, a positive balance of almost $100 million has been secured. 
“The main drivers of export growth are consumer goods and the so-called intermediate goods, which are used not for final consumption but for further production of goods and services,” Andrei Kartun stressed. “We keep maintaining high rates in terms of physical export volumes. An increase of almost 13 percent has made it possible to compensate for the decline in export prices. They have dropped by over 9 percent — this is how the global market environment has developed. We expect that towards the end of the first half of the year, the cost factor will cease to affect our performance indicators, and the export growth rate will rise with the same physical volumes.”   
At the same time, a positive trend has emerged in the diversification of external supplies. According to the Ministry of Economy, sales to Asian countries, including China, as well as to African countries have increased significantly.

BELAZ, Zhodino.    Ilya Shvedko 

Belkommunmash Holding.         Yegor Yermalitskiy

EXPERT OPINION

Academic economist Mikhail Kovalev,
“The results of the first two months are encouraging. First of all, I am glad that inflation remains low. The last February to current February increase is 5.6 percent. This is below the targeted 6 percent. There is also hope that the National Bank will reduce the cost of money. Cheaper money, in turn, may bring about the revival both in the economy and in housing construction. The overall economic growth results are not bad. Our manufacturers are actively occupying the niches vacated after the departure of Western companies from Russia. The population is particularly pleased with growing incomes. This, in turn, has led to a phenomenal 12.6 percent increase in trade. Our citizens have begun to go to restaurants and cafés more. I would like to note the fact that the country’s gold and foreign exchange reserves have exceeded $8.2 billion. Moreover, they have grown not only in terms of gold but also in terms of ‘live’ currency. This is a consequence of the fact that exports are increasing this year. In fact, it is ahead of imports. Therefore, the trade balance is positive, which means there are no problems with the currency in our country.”

Deputy of the House of Representatives Denis Karas,
“The positive dynamics in the industry remains. Moreover, Belarus is the leader among the EAEU countries in industrial production. Our country can offer high-quality industrial products at an affordable price. Today, the enterprises of the Ministry of Industry alone supply products to 65 countries of the world. Amid a difficult geopolitical situation, we are actively diversifying exports, ramping up supplies to Asia, Africa and China. The ongoing comprehensive modernisation of the existing production facilities allows us to enter the market with competitive and in-demand products. The implementation of import substitution projects with the Russian Federation began in a timely manner. It is important that investors who want to implement major projects come to our country. They are attracted to a healthy and decent business environment. Belarus is a predictable country. It is feasible and necessary to work here.”

By Vladislav Sychevich