Stop, One, Two!

Why the Belarusian economy is slowing down.

According to the results of the first half of the year, Belstat has two pieces of news for us. One, as usual, is good, while the other one would be better not to have it at all. The good news is that in June, the stock of unsold products in warehouses has not changed. But it happened not because they began to sell more, but because they began to produce much less, writes the site "Belarusians and the market".

Belarusian economy has been steadily slowing down since the end of last year. Back in December, the annual GDP growth was above all expectations and amounted to 4%. But since January, the economy has stopped meeting expectations. In the first month of the year it grew by 3.7%, by June the growth rate slowed down to 2.5%, and at the end of six months it slowed down to 2.1%.

And this, of course, is not what the authorities expected from their economy. Because according to official forecasts, the rate of economic growth this year should be at least twice as high. But the reality turned out to be worse than the pessimistic forecasts. At least, moderately pessimistic ones, which predicted GDP growth in the range of 2-3%. And so far everything is going to the point where even the pessimists may be shamed.

The main driver of the Belarusian economic growth, industry, has turned into the main brake. For six months, industrial production grew by only 0.3%. But dubious tenths of a percent is a consequence of statistical inertia. When in the first months of the year the Belarusian industry produced much more than it could sell.

As a result, stockpiles exceeded 80% of the monthly output. And since it was impossible to find a useful use for them, Belarusian factories began to reduce production at the end of spring.

Warehouse stocks have almost stopped growing, but the indicators have deteriorated. And most of all the indicators have deteriorated in the manufacturing industry, where the growth for six months amounted to a symbolic one tenth of a percent. And, judging by the regional statistics, the Belarusian oil refining and everything related to it was among the most affected.

In Vitsebsk voblast, where the Naftan refinery is located, industrial production decreased by 2.8%. Mozyr oil refinery collapsed industrial production in the whole Gomel region by 3.1%.

But other enterprises did not do much better. So, in May industrial production decreased by one percent, and in June it decreased by 3.2%.

Agriculture was not able to pick up the baton. Over six months, agricultural production decreased by 2.7%, and in June it fell by almost eight percent. Although one can at least blame unfavorable weather conditions. Belarusian food security was undermined by snow and rain, so the harvesting campaign started almost a month later than a year ago. And, judging by the current weather conditions, this harvesting campaign will not end with any records.

But if in one place, or even in many places, everything is bad, then somewhere must be good. And that is how it is. This year the Belarusian economy is not very good at earning. But it is spending with all its pleasure.

Retail trade turnover grew by 9%. It's not a big surprise, considering that there are not enough people in the country, so the growth of incomes is far ahead of economic growth.

Investments in Belarus for six months increased by 14%, while construction - by nine and a half. That is, a clear scheme that has been clear since the times of Peter Prokopovich: they gave themselves money and then concreted the money themselves. The benefits of this scheme are doubtful, but the indicators are immediately obvious to everyone.

And it is these indicators that have allowed us to maintain the GDP growth rate at its current, albeit very modest, level. However, the growth of expenditures while production is declining has a bad effect on financial stability. So, so far, everything is going to the point where the Belarusian economy may have neither stability nor growth.

You can support the website Charter97.org

MULTI-CURRENCY ACCOUNT FOR ASSISTANCE:

Bank's name: Bank Millennium S.A.
Address: ul. Stanislawa Zaryna, 2A, 02-593, Warszawa
IBAN: PL97116022020000000216711123
SWIFT: BIGBPLPW
Name of the account holder: Fundacja “KARTA ‘97”
Purpose/title of payment: Donation for statuary aims

You can contact us by the e-mail charter97@gmail.com