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20 June 2016, 11:29

Kovalev: Lower inflation and interest rates on loans among main economic goals in 2016-2020

MINSK, 20 June (BelTA) - Lower inflation and interest rates on loans will be one of the main economic goals during the period until 2020, Dean of the Economics Department of the Belarusian State University Prof. Mikhail Kovalev told BelTA while commenting on the draft program of social and economic development of Belarus in 2016-2020, which will be discussed at the fifth Belarusian People's Congress.

Mikhail Kovalev believes that the plans for the current five-year plan need to be assessed in the light of Belarus' development for the previous 20 years. According to him, the country has managed to maintain social justice, good free healthcare and education. “Despite some slowdown in the last three years, the average annual growth in the wellbeing was 7.6%. It is almost the Chinese growth rate,” said Mikhail Kovalev.

Mikhail Kovalev drew attention to the fact that Belarus has managed to avoid the inequities of society, social stratification. According to the UN, Belarus has entered the top ten countries that have made the most progress in this regard. Belarus coexists in this ranking with Denmark, Sweden, and Germany. “The country is set to maintain social justice, and is at the same time trying to introduce market-based methods to improve the efficiency of the economy,” he added.

According to Mikhail Kovalev, one of the main targets for the five-year plan will be to reduce inflation, cheapen money (interest rates) and attract investment. “Whatever we say about foreign investments, the international experience shows that out of 100 invested rubles, only 10 are foreign and 90 are domestic ones. We, first of all, should rely on the people's savings, the national capital. We should reduce inflation and make money cheaper in order to boost the investing process. This will help revive the housing construction market and set up new production facilities,” said the expert.

According to Mikhail Kovalev, if by the end of 2020 inflation is reduced to 5% and interest rates on loans go down, the goals of the draft program will be fulfilled. “The key figures are more modest than in the previous five-year periods, but they are real, with the situation on the foreign markets and prices for oil products taken into account,” he noted.

Belarus has been actively searching for new markets, diversifying exports. This adds optimism that the goals will be met. The country does not focus on the engineering industry which is shrinking gradually worldwide, and develop other areas as well. The Belarusian IT sector has made great headway in recent years. By the end of the ongoing five-year period Belarus' annual software exports may reach $2 billion. According to Mikhail Kovalev, the further development of the IT sector, innovative manufacturing facilities will help build a knowledge-driven economy.

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