Belarus authorities expecting economic downturn in 2016

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At the recent meeting of the House of Representatives committee on economic policy the authorities recognized for the first time that this year’s projected economic growth cannot be reached.

Last year international and independent Belarusian experts said that the government forecasts for economic growth for 2016 were unrealistic from the outset.

The authorities, however, argue that the failure of the planned indicators is due to sharp deterioration in foreign conditions.

“In the present situation we can see worsened foreign conditions compared to those who were in the first half of the year. We have considered the possible fall of GDP in 2016 by 2%,” admitted Zuzyankou of the Ministry of Economy.

In the second half of this year, foreign conditions for Belarus did in fact deteriorate through the gas dispute with Russia. In response to the Minsk’s underpayment for natural gas, Russia cut supplies of crude oil. But this, according to the Prime Minister Andrei Kabyakou, cost our economy just 0.2% of the GDP, ie – 0.1% of the expected fall this year. Experts have concluded that the main reason for the decline is the authorities avoiding the necessary reforms aimed at increasing the competitiveness of the economy.

“Some things are done which are cosmetic or unpopular but easy,” said Vadzim Iosub, senior analyst at ‘Alpari’.

But the real deterioration in foreign conditions is expected by the authorities next year. The cost of oil, according to the conservative scenario of the Ministry of Economy, could fall to $ 35 per barrel — from the existing $ 48. But even under such circumstances, the government yet again predicts growth for the next year’s economy by 0.2%, and salaries – by 1.5%.

In recent years, government forecasts have been traditionally more optimistic than reality. According to senior analyst at ‘Alpari’ Vadzim Iosub, next year the situation will be similar. According to experts, at the present pace of reforms which is close to zero next year we are in for the continuation of economic decline and rising unemployment.

Stanislau Ivashkevich,  Belsat

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