11 December 2019, Wednesday, 11:28
The Wait Is Nearly Over

Belarusian Economy May Face Another Soap Bubble

Belarusian Economy May Face Another Soap Bubble

An ancient situation seems to repeat itself.

A few days ago Belstat published sad statistics, which suggests that the Belarusian economy may soon enter the “zone of turbulence.”

Thus, for five months from the beginning of the year, the country's GDP grew by only 1%.

- Of course, this is not enough. And we see that the forecasts of all world experts have been going down lately too. The same World Bank predicts annual growth of the Belarusian economy as less than 2%, economist Barys Zhaliba notes in an express-comment to Solidarity.

According to the interlocutor, the main reason for this stagnation were adverse external factors. First of all, the problems with the supply of the Russian oil:

- Because of the “dirty” oil, the Mazyr Oil Refinery, which, moreover, has long been in need of repair, stood idle. We had to pump this oil back - and all this, of course, reduced our flow of exports of petroleum products.

Also, according to the economist, the notorious modernization, which the Belarusian authorities have unsuccessfully carried out for many years, does not give returns.

- Take the woodworking industry as an example. At the first glance, there is an increase in the GDP. And there is growth in other enterprises for which we carried out the so-called modernization from above ... But the loans for them have become so heavy that now they are in a net loss, - Zhaliba points out.

In addition, according to the economist, problems in agriculture have recently been brewing in Belarus due to the abnormal heat:

- We see that the Homel region has already “burned out”, therefore, agriculture this year is also likely to be a minus.

Against this background, when the labor productivity in the country “lags behind the growth of the real incomes of the population”, the Belarusian economy may face another bubble of rising wages, which in 2011 ended with devaluation.

- But we already see that pensions are planned to be raised, it will be possible that salaries of state employees will grow ... That is, the ancient situation repeats itself, when people sacrifice economy for political purposes.

All our neighbors are running way ahead of us, especially Poland, which is growing at least 3% per year. And we are lagging behind. In order for Belarus to gradually start to catch up with its neighbors, you need to have a fabulous percentage of the GDP growth: about 7-8% annually. Now it is unreal.

For this, it is necessary to carry out reforms, change the approaches to the management of the public sector, engage in privatization, especially of our large enterprises. Unfortunately, we do not observe anything in this direction, - Barys Zhaliba notes.