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12 May 2022, 19:59

Belarusian economy going through structural transformation

MINSK, 12 May (BelTA) – The Belarusian economy is going through structural transformation. Belarusian Economy Minister Aleksandr Chervyakov made the statement when asked about economy performance in January-April 2022 after a session of the House of Representatives of the National Assembly, BelTA has learned.

Aleksandr Chervyakov stressed that the economy is operating steadily. The government analyzes the situation in all branches of the economy and all regions of the country 24/7. Problems are being promptly looked into and decisions are being made. Close attention is paid to major GDP generating enterprises and local economic mainstays.

The official said: “MAZ, MTZ, BelAZ, Gomselmash, Minsk Motor Plant, and our other flagships are operating at full capacity. Their portfolio of orders will last for at least 3-4 months. Apart from that, fresh data from the polls our economic institute arranges every month indicate favorable changes of the dynamics of the industrial optimism index, the demand level, workload and output figures. It means the respondents see their short-term development in a positive light.”

The economy minister went on saying: “No doubt, the unprecedented sanctions are having an impact on the operation of our enterprises by restricting their access to target markets, restricting the acquisition of individual components and raw materials. Trade with Ukraine has been terminated completely and Ukraine accounted for 11% of our export last year. Our enterprises are busy redirecting export to markets of the Russian Federation, China, and other friendly countries. New logistic routes are being built.”

In January-April 2022 Belarus' GDP is expected to slow down by at most 2% in comparison with the level of last year. The industries affected by the sanctions make a substantial negative contribution. As far as the manufacturing sector is concerned, the traditional earners are food producers, manufacturers of transport solutions, woodworking, pharmaceutics, electronics, and other ones.

According to the source, despite the late spring Belarusian farmers successfully proceed with sowing and planting. The amount of applied fertilizers will be increased by a third in comparison with last year. State-run agricultural enterprises are supplied with fuel and crop protection agents and their vehicles and machines are maintained well. All of it creates a foundation for a good harvest and good annual performance figures, Aleksandr Chervyakov said. Housing construction is ahead of projections. Hard work is in progress to export civil engineering services to the Russian Federation – the export volume rose by 13% in Q1 2022.

As for the sphere of services, the IT industry and retail trade continue growing. After demand for sugar, cereals, butter, and other products spiked in April the consumer market situation has been stabilized. Passenger turnover increased, particularly to the Russian Federation, after COVID-19 related restrictions were lifted. New destinations in the southern direction and the southeastern direction are being explored.

As far as foreign trade is concerned, in Q1 2022 export rose by $0.5 billion or 5%. Surplus from export is at an all-time high – nearly $1 billion, including $1.2 billion thanks to the export of services. The top earners were food industry, transport manufacturers, woodworking industry, and metalworking industry. As for the sphere of services, the top earners are IT industry, transportation, and financial services.

Aleksandr Chervyakov said: “People should not feel the effect of the sanctions. It is a priority task for the government. To accomplish that, it is necessary to compensate for the underperforming industries, which are affected by external restrictions. A clear-cut algorithm of our actions has been worked out. We understand that the Belarusian economy is going through structural transformation. Logistic chains are being reworked as well as target markets and acquisition markets. The share of the U.S. dollar and the euro is decreasing in the system of transactions while the share of the Russian ruble and the Belarusian ruble is on the rise. Imported components and raw materials are being replaced with domestic goods from friendly countries. There are problems with the underdeveloped infrastructure in new transport destinations, which prevent a drastic increase in transportation volumes. All of it can be improved. Time is needed to redesign the entire economic mechanism. What matters is that enterprises keep working, keep people employed, pay out salaries while the state honors its social commitments,” the economy minister stressed.

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