Last Tuesday, meeting of the Council of Ministers considered the economy results for the first half of the year. It is noted that it has reached positive annual growth rates. The GDP has increased, the demand for Belarusian products in foreign markets is growing. At the same time, the inflation has decreased significantly. This contributes to the real growth of wages and disposable incomes. We asked our experts what helped to achieve such results.
Irina IVANOVSKAYA, BISR analyst, Candidate of Economic Sciences:
— Early this year, the Head of State set a task to enter a positive growth trajectory, doing everything possible to adapt the economy to unprecedented sanctions pressure. Assessing the economy performance in the first half of 2023, it should be noted that the Government has coped with the task. Timely measures taken at the state level, a good external environment and a soft monetary policy have done their job. The success of the Belarusian economy is obvious and undeniable — GDP increased by 2 percent, the growth of which was provided by industry, construction and trade.
The incomes of the population have increased. The growth of real wages is 7.4 percent, labor pensions — 12. This dynamic was ensured thanks to the increase in production volumes and record low inflation rates, the annual level of which in June was 2.9 percent. The unemployment rate in the country, according to the methodology of the International Labor Organization, is also at a record low.
The growth of real incomes of the population had a positive impact on the dynamics of retail turnover, which increased by 4.6 percent in the first six months of 2023. The wholesale trade turnover also showed a positive result — it has increased by more than 5 percent. Investment growth has noticeably accelerated. In annual terms, this is 7.2 percent. Various investment projects are being implemented in the manufacturing industry, agriculture, and transport, including within the framework of implementing the instruction of the Head of State "One district — one project". Another positive aspect related to investments is that enterprises finance the purchase of machinery and equipment to a greater extent, which is a marker of focus on the production development, and not on "patching holes". Transport and social infrastructure is also actively developing, housing construction is progressing in accordance with state and regional investment programs.
In the first half of the year, exports of goods in value terms, despite sanctions, increased by 12.4 percent compared to the same period last year. This confirms the demand for Belarusian products in the markets of friendly countries. Imports have increased by 22.6 percent — primarily supplies of investment equipment, machinery and components.
The task for the second half of the year is even more ambitious — not only to fulfill the most important parameters of the forecast of socio-economic development of Belarus for the current year, but also to cope with the observed turbulence in the foreign exchange market and prevent economy overheating which, in principle, seems achievable.
Svetlana GORVAL, Member of the Standing Committee on Economic Policy of the House of Representatives:
— Based on the first half of 2023 results, only one of the five key parameters of the forecast was not fulfilled - investments in fixed assets (107.2 percent with a target for the first half of 108.1). At the same time, there is a positive trend in the country as a whole — an increase in investments growth rate against January — March of this year made 10 percentage points. The main reason for the investment shortfall, in my opinion, is, first of all, a decrease in the volume of housing construction and the related infrastructure. Not all regions have implemented the investment tasks in the regions.
Investments are the basis for the economy development, the introduction of new technologies, increasing labor productivity and, ultimately, the quality of people's lives. At the same time, despite the difficulties in attracting investments into the economy of our state related to the current global foreign policy and economic situation, work is progressing on a systematic basis in the republic to improve the conditions for doing business, creating comfortable conditions for attracting investments into the economy.
An important direction in terms of reducing the possibility of attracting foreign investment is the use of the domestic investment potential.
In the near future, the Government will submit to the House of Representatives a draft law of the Republic of Belarus providing for a large-scale adjustment of legislation in the field of investments. The innovations proposed by the bill are aimed at creating and updating conditions to implement large-scale investment projects that are important for the Republic of Belarus, updating the institute of investment contracts. In general, adopting the draft law will expand opportunities for investing in the country's economy, will contribute to increasing the investment attractiveness of the Republic ¬of Belarus, including by creating additional conditions for protecting the rights and property interests of investors. We should not forget that improving the investment climate in the country and attracting investment is one of the key priorities of the socio-economic development of our state.