Belarus economy growth rate continues accelerating

Growth rates in the majority of the most important indicators continue growing in comparison with the same period of last year. As a result, over the ten months 17 out of 19 most important targets of the 2008 social and economic development forecast were reached.

In January-October 2008 Belarus’ GDP grew by 10.7% up on the same period of 2007 while the annual forecast is set at 8-9%. In January-October 2007 the GDP growth totalled 8.4% as against the same period of the year before.

The industry-added value in the GDP amounted to 29.9%, agriculture — 9.2%, construction — 8.8%, transport and communication — 7.8%, trade and public catering — 10.5%.

The GDP growth was accompanied by falling GDP energy intensity. In January-September the GDP energy intensity shrank by 7.8% in comparison with the same period of last year (the annual forecast stands at minus 7-8%).

In January-October 2008 the index of physical volume of production in the Belarusian industry amounted to 112.8% as against the corresponding period of last year (the annual forecast stands at 8.5%).

In January-October 2008 the consumer goods output made 112.7% as against the same period of last year (the annual forecast is set at 109-110%). The foods output amounted to 113.3% (the annual forecast — 108-109%), non-foods production — 112.4% (110-111%).

Decreasing production costs, in particular, reduction of materials consumption, is one of the most important ways to raise economy effectiveness. In January-October 2008 the falling materials consumption trend continued in the industry. All in all, in January-September materials consumption in the industry went down by 2.7%, thus exceeding the annual target (1.5% reduction).

In January-October 2008 agricultural output increased by 8.1% in comparison with the same period of last year, while this year’s target is set at 7-8%. Positive dynamics of animal production continues in Belarus. In January-October 2008 the amount of cattle and poultry sold for slaughter (live weight basis) increased by 5% in comparison with the same period of last year, milk production — 8.9%, egg output — 5.2%.

Belarusian agricultural companies have virtually finished the harvesting campaign. This year’s yield of major agricultural crops exceeds last year’s. Grain production (without corn) went up 28% in comparison with the previous year, with the yield as high as 38.7 centners (30.8 centners per hectare in 2007). As of November 3, 2008 the gross potato production stood at 971,000 tonnes, 22% up on the year. Potato yield made 206 centners per hectare against 186 centners per hectare in 2007. This year’s vegetable production exceeds last year’s by 40.7%, with the yield averaging 191 centners per hectare (153 centners per hectare in 2007).

Measures taken by the government to encourage investments, organise business planning of investment projects contributed to a 23% increase in fixed-capital investments in January-October 2008 (this year’s forecast is set at 15-17%). In January-October 2007 fixed-capital investments increased by 15% up on the corresponding period of the year before.

In January-October 2008, the expenses connected with the purchase of machines, equipment and vehicles were 27.5% up from the same period of 2007. They accounted for 43.3% of the total investments. Capital investments in production facilities were 22.6% up from January-October 2007. Over the ten months, the capital investments accounted for 25.9% of the GDP as against 24.3% in January-October 2007.

In January-October 2008, the utilization of funds allocated for financing the projects included in the 2008 State Investment Programme made up Br 1,754.1 billion or 86.5% of the annual amount, including Br1,364.5 billion (91%) that came from the national budget. During the same period 18.3% of the total investments was spent on housing construction.

Over the ten months of 2008, 4,101.4 thousand square meters of housing was put into operation which is 78.9% of the projected amount. The total area of the housing constructed in January-October 2008 was 10.1% up from the same period of 2007.

In rural areas 1,260.9 thousand square meters of housing was put into operation which accounts for 30.7% of all the housing constructed in the country over this period (34.1% in January-October 2007). In rural areas and small towns 1676.1 thousand square meters of housing was constructed over the ten months which is 2.8% up from the same period of 2007.

The foreign trade efficiency of the country in January-September 2008 is revealed through the following figures. The foreign trade in goods and services according to the method of balance of payments in actual prices was 53.9% up from the same period of 2007 (the annual projection is 14.5-15.5%), with export 53.9% up (16-17%), import 54% up (12.5-13.5%).

According to the method of balance of payments, the deficit in trade in goods and services over the nine months amounted to $2,474.3 million (projected at $1,400-1,420 million for 2008). The deficit in foreign trade in goods totalled $3,737.6 million, while the surplus in trade in services made $1,263.3 million.

The economic growth contributed to maintaining the outstripping growth rate of real cash income of the population. In January-September 2008, the real cash income of the population (adjusted to the consumer price index) rose 11.9% from the same period of 2007, projected at 9-10% for 2008.

In January-September 2008, the salaries of people working in the production area kept growing. According to the National Statistics Committee, in January-September 2008 the nominal monthly wages of Belarusians averaged Br 857,000 or $401.5, 25.5% up from the same period of 2007. In September the wages amounted to Br942.9 thousand or $445.9, 32.1% up from September 2007 which is 18.8% up from the projected amount.

In the budget sector the nominal wages in January-September made up Br693,500, or $324.9 in equivalent, up 15,2% over the same period last year. The wages in September amounted to Br705,900, or $333.9, up 16.9% from September 2007. Real wages increased by 9.2% in January-September 2007 over the same period last year.

The pension system functions stably. In order to increase labour pensions and to ensure uptrend the labour pensions were indexed twice (in February and August). Minimum labour and social pensions were increased three times following an increase in the per capita subsistence wage.

In October 2008, the pension averaged Br389,400, old age pension Br408,300, disability pension — Br357,200, survivor’s pension — Br242,400, social pension Br169,800. Real pension (pension adjusted to the CPI) was up 11.4% in October 2008 from October 2007.

The Economy Ministry says that the situation on the labour market is manageable, the unemployment rate is within socially acceptable limits. In October 2008 the registered jobless rate made up 0.8% of the economically active population (the 2008 projection is 1.2-1.4%).

In January-October the retail trade including public catering was up 22.9% over the same period last year while the projection for 2008 was up 10-11%.

Paid services in January-September 2008 went up 13% over January-September 2008 (the forecast up 9-10%). The services provided by state-run organisations accounted for 56.7% of the total volume, those by privately-owned companies — 36.1%.

In January-October the consumer price index amounted to 10.5%, or 1% per month on average.

In January-September the financial state of the organisations of the real production sector kept on improving. The profitability of sold products, works and services made up 15.9% as against 12.4% over the same period last year, profitability of sales — 9% as against 7,2%. The profitability of sold products, works and services of industrial enterprises in January-September reached 18.1% (January-September 2007 – 13.2%), profitability of sales — 12.6% (January-September 2007 – 9.6%).