5 March 2021, Friday, 13:38
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How the Belarusian Economy Fails Five-Year Plans

How the Belarusian Economy Fails Five-Year Plans

Back to the past.

Since Soviet times, it has been customary in Belarus to announce ambitious plans for economic growth and other indicators for every 5 years. It is interesting that the last two five-year plans have failed in almost all respects. Myfin.by shows as clearly as possible how the plans collide with the harsh Belarusian reality and what comes of it.

Recently, Belarus announced new 5-year plans until 2025, which provides for the general economic growth of more than 20% over 5 years, and real money incomes of Belarusians should also rise by 1.2 times. It is noteworthy that the five-year plans for 2011-2015 and 2016-2020 failed in almost all respects. Especially the plans of 2011-2015 did not coincide with reality. So, instead of the government's expected economic growth of 62-68% over 5 years, we got a modest growth of 5.9%. The industry did not justify itself at all, which was supposed to give 60% growth, which gave only 4.5% increase in 5 years.

During the same five-year period, the Belarusians received two devaluations and a 5-fold increase in the dollar exchange rate, and the reckoning on foreign investments was in vain: instead of their planned growth by 3 times in 5 years, a 12.7% reduction was obtained.

The last five-year period from 2016 to 2020 was also not very successful: instead of the planned economic growth of 15% (2020 by 2015), they got 5 times less - 3.54%.

Another noteworthy fact is that the Belarusian GDP in dollar terms (adjusted for inflation) by 2020 even decreased by 1.16% compared to 2015.

The authorities are again very optimistic about the next five-year plan for 2021-2025. The economy is expected to grow by 21.5% in real terms, and the dollar exchange rate in calculations for 2025 is expected at 2.83 rubles. They decided not to look for new sources of growth in the next five-year plan, and again they are betting on the growth of investments and exports. Failure to fulfill growth plans and even their fall in the past two five-year plans also did not bother anyone.