3bn dollars stored in warehouses of Belarusian plants

Belarus's industrial production is expected to further decline in the second half of the year.

Economist Leu Marholin spoke to charter97.org about a 4.5% drop in the industrial output in Belarus.

“The matter is that the industrial output is compared with last year's results. As we know, solvents and thinners accounted for a large share in the total output in the first half of the last year and in July. We don't have them now and this is the main reason for the decline. We also exported biofuel to Ukraine, but we don't do it now,” the expert says.

He adds there are problems in other sectors.

“If our automotive industry produced goods in demand in necessary quantities, the decline wouldn't be that deep. But 3 billion dollars that are stored in warehouses is a phony output. We can produce more, but it has no sense because no one needs it. I think the decline rate will slow down to 2-3% in the second half of the year because the base will change. But the decline will continue,” the economist says.

He underlines the slump will deepen if a task to clear inventories is set.

“As for the oil agreement for the fourth quarter, it will be signed of course. It was possible to sign it for the whole year were it not for one obstacle. The Belarusian leadership wants the whole volume of oil to be supplied to Belarus by pipeline, which Russia cannot agree on. It probably would agree, but the Belarusian party doesn't fulfil its obligations on setting up the MAZ-KAMAZ holding company and so on. That's why oil agreements are signed every quarter of the year and a part of oil is shipped by rail, which is more expensive than pipeline supplies,” Leu Marholin noted.

He said no one expected Belarus's GDP growth to reach 8.5%.

“Even the government has understood 8.5% will not be achieved. It will be good if the GDP is two or three times less. The most modest expectations are 1.5% and the most optimistic scenario is 3%. It to a large extent depends on trade. And again, retail turnover is in large part based on imported goods. If it were not for it, we wouldn't have not only growth, but also a decrease in GDP,” the economist summed up.

Belarus's industrial output slumped 4.5% in the first half of 2013.