Dynamics are powerful. Aleksandr Chervyakov — on the results of the economy in the first half of the year

The growth of GDP, exports and real incomes of the population, inflation is at a historic low: Economy Minister Aleksandr Chervyakov spoke about how the Belarusian economy copes with external challenges

Key parameters achieved

 “Belarus has been under unprecedented external pressure for the second year. In general, we managed to successfully overcome the first and most difficult stage — the adaptation of the economy to the new reality,” the relevant minister noted, assessing the work of the Belarusian economy in the first half of the year. 
He stressed that the timely measures taken by the government made it possible to avoid the development of events according to a negative scenario in 2022: enterprises continued to operate, people were protected from the sanctions strike, and the state fully fulfilled its social obligations.
This year, the minister recalled, the task is to move from the stage of adaptation and economic recovery to growth, “The results of the economy in the first half of the year are an indicator of how effectively it is possible to solve it and where there are reserves for development.”
Aleksandr Chervyakov draws attention to the fact that according to the results of six months, four most important parameters were met in excess of the established targets: GDP (102 percent with a forecast of 101.9), exports (an estimate of 109.4 percent with a plan of 102.9), real incomes of the population (103 percent with a forecast of 102) and the inflation rate (103 percent with the bar not exceeding 106.9). 
“We slightly fell short in terms of investments (107.2 percent with a forecast of 108.1), but the dynamics achieved — plus 10 percentage points compared to the pace of the first quarter — allows us to talk about a well-formed set of measures to boost investment,” the relevant minister explained.
 

Growth leaders

“Industry is at the forefront. For half a year it has added 6 percent, and in ‘net’ June — 15.5. We increased the production of passenger cars by almost three times, trucks — by 30 percent, forage and grain harvesters by more than 26 percent, television sets by almost 2.4 times, elevators, fabrics, clothes, shoes, and so on. It is important to note that the products did not go to the warehouse,” Aleksandr Chervyakov emphasised.
High rates in construction (gross value added in January-June 2023 amounted to 106.1 percent) are ensured through the implementation of contract work for major and current repairs (growth rate of 125.5 percent), landscaping, construction and reconstruction of highways of republican status, water deironing stations and construction of housing within the framework of the state investment programme and regional investment programmes. 
He drew attention to the fact that the social infrastructure is actively developing: within the framework of state programmes, nine kindergartens, ten schools, five swimming pools, 53 hospitals and clinics, 12 sports and recreation centres, 23 sports facilities are being built.
“All this is a real investment in improving the quality of people’s lives,” the head of the Economy Ministry is convinced.
Continuing the topic of construction, the head of the economic department stated that the tasks for housing construction, including with state support, were completed by all regions in the first half of the year, “In January-June 2023, 1,758.9 thousand square metres were put into operation (for 16, 9 percent above the plan), of which about 30 percent — with state support (plus 13.2 percent to the plan).”
Aleksandr Chervyakov also noted an increase in the contribution of domestic demand to economic growth compared to the first quarter of this year, “Retail trade plays a big role here, which added more than 12 percent in the second quarter. In general, for the first half of the year, the growth amounted to 104.6 percent.”
Wages, pensions and benefits are rising. At a historical minimum, inflation is 102.9 percent by June last year, 103 percent by December 2022. Consumer lending in the first half of this year increased by 1.5 times compared to the same period in 2022.
“This trend indicates that society has adapted to new conditions. Belarusians have become more confident in planning for the future and are switching to their usual active consumer behaviour,” the minister is convinced.

The numbers are impressive

The volume of exports increased by $1.8 billion, or more than 110 percent compared to January-May last year. The balance of trade in goods and services is positive. The export of consumer (128.3 percent) and investment (121.9 percent) goods grows most actively.
According to Aleksandr Chervyakov, such an increase is provided by physical volumes, “This fact confirms that our products have found their customers in the markets of friendly countries and are still in demand. So, in January-May alone, deliveries to Russia amounted to $10.3 billion, which is comparable to the annual volumes in 2015 and 2016.”
According to him, the share of Belarus in Russian imports is being restored. In 2023, it approached 9 percent, which is significantly higher than the average level in the last 20 years — 5-6 percent.
“Sales to China have reached the $1 billion mark, already exceeding annual exports through 2022. Accordingly, there are all prerequisites for reaching the target 2.2 billion,” the minister believes.

 Investments are growing

“The government is pursuing a proactive investment policy aimed at creating new industries, modernising the industrial sector, and building infrastructure. For objective reasons, the external inflow of capital is currently limited. Therefore, the task was set to attract and effectively use internal sources, primarily the own funds of enterprises, the resources of banks, the budget channel,” the head of the Economy Ministry noted.
He stressed that this approach is already bearing fruit, “In the first half of the year, we managed to reverse the negative trend of the last three years to reduce investment in fixed assets. They are growing rapidly. Based on the results of work for the first half of the year, investments in fixed assets amounted to Br14.9 billion, or 107.2 percent. At the same time, the purchase of machinery and equipment is financed to a greater extent — an increase of 119.1 percent.”
In other words, enterprises do not invest ‘in premises’, but in the active part of fixed assets, where added value is generated.
By the way, this year it is planned to implement 812 investment projects with an investment volume of Br6.2 billion.
The centre of attraction of capital is the manufacturing industry. Investments are also made in agriculture, forestry and fisheries, mining, construction and transport.
“The implementation of 29 industrial investment projects has been completed, of which three are ahead of schedule. We are actively working on the implementation of the instructions of the Head of State ‘One district — one project’. Today, there are already about 156 projects, thanks to which more than 9 thousand new jobs will appear in the regions,” the minister stated.

Rising salaries and pensions

“Increasing the income level of the population is a priority task of the government. According to the results of January – May 2023, the growth rate of real disposable income amounted to 103 percent (plus 1.4 percent compared to January – April),” Aleksandr Chervyakov emphasised.
According to him, wages in nominal terms in the first half of the year approached Br1,800, including 1,927 in June. In real terms, the growth was 7.4 percent.
“This dynamic is supported by production growth and record low inflation rates,” the relevant minister explained.
Labour pensions are increasing at an even higher rate — plus 12 percent in six months. The average retirement pension now exceeds Br680.
The unemployment rate in Belarus continues to decline. In the second quarter of 2023, in accordance with the methodology of the International Labour Organisation, it decreased to 3.4 percent.
“Thus, today we can say that the Belarusian economy has recovered and entered the growth zone,” Aleksandr Chervyakov summed up.

Based on materials of belta.by