PM: Belarus' economy remains extremely balanced despite sanctions

12:25, 10 August

Despite the sanctions and the related challenges, the Belarusian economy has achieved an unprecedented balance as far as quality indicators are concerned, Belarus' Prime Minister Roman Golovchenko said at the meeting of the Council of Ministers hosted by Belarusian President Aleksandr Lukashenko on 9 August to discuss the functioning of the country's economy under sanctions and measures to overcome them, BelTA has learned.

The head of government admitted that the domestic economy has to operate amidst a very challenging external environment, since the sanctions imposed on Belarus by a number of countries affect all aspects of the export, from product delivery to transfer of revenues. According to the prime minister, in order to make up for the income lost to the sanctions, a set of measures has been taken to boost production and export in other industries. An increase in production of certain goods will push gross output up and generate additional revenue.

“The export of goods is growing every month, and in June it almost reached last year's level, and the export to Russia hit its all-time record of $2 billion per month,” he said.

“The economy has contracted, but, in our opinion, it has never been so balanced before. This shows a high adaptability of the economy to external shocks and the adequacy and effectiveness of the measures taken,” Roman Golovchenko said. He cited some statistics to illustrate his point.

Thus, the gross external debt is the lowest in the past seven years, the debt burden of enterprises is decreasing, the debt-to-revenue ratio is slightly more than 50%, which is the best ratio over the past six years. The share of poorly-performing organizations dropped by 1.5 times, the profitability of sales is 8.1%, the highest in the past ten years. Foreign direct investment on a net basis amounted to $1.8 billion in Q1, which is an all-time record. “This confirms that despite external pressure the country retains its investment appeal and foreign companies reinvest funds in the economy,” the premier said.

In January-July, Belarus posted a record high trade surplus of $2.3 billion. “Thus, our foreign trade is generating record-high foreign currency revenues, which helps maintain stability on the foreign exchange market. Now there are no imbalances that would prevent us from stimulating economic growth,” Roman Golovchenko stressed.

Speaking about the government's tasks for the near future, the prime minister announced plans to provide maximum possible support to the non-primary economic sectors that will be competitive in foreign markets. There are plans to increase exports to Russia to $23 billion, up 40% over the past year; the export to China is to amount to $2 billion, up 2.2 times over the past year. Exports to far-away countries will also expand to exceed $9 billion. In addition, a draft agreement on the allocation of Russia's loan to implement import substitution projects is at the final stage. “By the end of the year we are to launch seven projects that were recognized urgent by the parties. These projects are estimated at $330 million,” said Roman Golovchenko. He specified that these projects have to do with production of lighting equipment and components for mechanical engineering.

According to the prime minister, improving the quality of life and welfare of people is an absolute priority for the government. Thus, a number of measures have been taken to maintain income growth: the base amount in the public sector will increase by 4.5% on 1 January to be followed by another increase in autumn. The minimum wage will go up by 14% at the beginning of the year, followed by indexation. Since 1 March pension benefits for retirees have risen by 7%, since 1 August by 10%. “As a result, the average retirement pension benefits for non-working pensioners in August will be Br638, up by almost 25% year-on-year,” the head of government said.

“The government is aware of the seriousness of the situation and the responsibility for fulfilling its tasks. Our success relies on mobilization, focus, and speed in decision-making. Being under such a tough pressure our economy has contracted, of course, but I believe that we have turned the corner, there are no shocks, tasks have been set. People know what to do. They need to fulfill their tasks,” the premier said.

The meeting also discussed the work of manufacturing, agricultural, construction enterprises and each of these industries.

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