BELARUSIAN ECONOMY & TRADE

"Using VAT (value added tax) collection scheme based on the country of destination in the Belarusian-Russian trade has positive consequences for Belarus on the whole", - noted Balazs Horvath of the IMF’s European Department. He explained: "The Belarusian budget will get additional revenues due to the expanded tax base."

“We appreciate Belarus launching indirect taxation based on the country of destination in trade with Russia, as the step will make the VAT taxation system more complaint with international standards,” - said the IMF representative.

He said: “One should differentiate between consequences of the new scheme for the country as a whole and for separate enterprises”. In his words, some Belarusian enterprises faced problems due to imports from Russia becoming more expensive, as Russian suppliers are unwilling to strip their prices from the VAT. Balazs Horvath believes, “The problems are temporary”.

IMF: BELARUS HAS BASIS FOR MARKET ECONOMY STATUS

(on the information from Interfax)

Belarus has created a good basis for granting the national economy the status of “market economy", - stated Balazs Horvath of the IMF’s European Department in Minsk on March 31^st .

“Great economic growth and a number of positive changes in the economic policy have created the foundation of granting “market” status to Belarus’ economy", - Balazs Horvath stated.

In his opinion, currently the country “has favourable conditions for conducting structural reforms and correcting the economic policy.

01/04/2005

IMF REVISES DOWNWARD 2005 INFLATION LEVEL IN BELARUS FROM 17,4% TO 12%

(on the information from BelTA)

The International Monetary Fund (IMF) has revised downward inflation forecast for Belarus for 2005 from 17,4% to 12% and GDP growth from 5,5% to 7,1%, Deputy Head of the North-East Department of the IMF European Office Balaz Horvat reported, reviewing the results of work of the IMF specialists in Belarus.

Previous IMF forecasts and forecasts of the Belarusian government differed, but have recently become closer in figures. “This is doubtlessly a positive fact in our cooperation”, - Balaz Horvat noted. “We believe, the Belarusian economic policy remains the same in the future”, - Balaz Horvat said.

The IMF mission came to a conclusion that reducing the inflation should become the main priority in the country. The reduction can be achieved in case the government policy is coordinated with the position of the National Bank. Besides, Balaz Horvat pointed to a number of positive changes in that the National Bank of Belarus discontinued to finance the budget deficit, that innovation funds are now included in the budget and other.

The IMF mission was in Belarus on March 16-31 for the annual consultations under the IMF agreement Art.4 on the economic policy issues. The consultations are held with every member-state of the IMF. The results of the consultations serve the basis for a report on the economic situation in a country, the policy and prospects of development for the year to come.

In the course of the visit the IMF experts considered the results of the monetary policy in 2004, its guidelines for 2005, studied the macroeconomic situation in the republic, its currency and stock markets, budgetary-tax policy and payment balance. The international organization also familiarized with the state of the banking sector in the republic, discussed the issues on creation of the monetary union of Belarus and Russia. The IMF mission held meetings with officials of the National Bank of Belarus, ministries of finance and economy and several others agencies of the republic.

BELARUS TOPS LIST OF BEST CIS INDUSTRIAL PERFORMERS IN JANUARY-FEBRUARY

(on the information from Interfax)

In January-February 2005 the greatest growth of industrial output among the CIS states was registered in Belarus, where the figure made 11.6%. The information was released by CIS Interstate Statistics Committee on March 31^st .

In Georgia the figure was 10.1% as against January-February 2004, Kazakhstan – 7.6%, Ukraine – 7.3%, Tajikistan – 5.9%, Azerbaijan – 5.7%, Armenia – 5.5%, Moldova – 4.5%, Russia – 3.9%.

The industrial output fell 7.4% in Kyrgyzstan. The CIS Statistics Committee has no information about the situation in Turkmenistan and Uzbekistan.

The average CIS industrial output growth made 5.0% in January-February 2005. The average CIS GDP in the period grew 4.0%.

In January-February 2005 Belarus GDP grew 9.7% in comparison with January-February 2004, Azerbaijan – 8.5% up, Tajikistan – 8.1% up, Armenia – 7.0% up, Ukraine – 5.5% up, Kyrgyzstan – 3.7% up. In Russia the production of goods and services in basic industries grew 3.9% in January-February 2005.

29/03/2005

GDP of Belarus in 2004 Is 15,7% Higher Than in 1990

(on the information from BelTA)

The GDP of Belarus in 2004 is 15,7% higher than in 1990. In fact, this is the best result among all CIS-states, Deputy Economy Minister Tatiana Starchenko informed. The GDP increase in 2004 against that in 1990 in Kazakhstan accounted for 103,4%, Armenia – 105%, Russia – 84,8%, Ukraine – 59,7% and Moldova – 45,2%.

In the dollar equivalent the GDP of Belarus increased from $10,5bln in 1995 to $22,5bln in 2004. The monetary-credit sphere has also been significantly improved. The level of devaluation of the national Belarusian currency against the US dollar has been reduced from 270% in 2000 to 1% in 2004, while the inflation rate in 2004 averaged to 1,1% per month. The confidence in the national currency has been improved and the growth in the amount of deposits of population and legal entities in the Belarusian banks bears witness to the above-mentioned fact.

Actual incomes of the population grew more than 2,7 times over 1996-2004 and the wages in the national economy reached the equivalent of $200 per month. Among the CIS participating states only Russia and Kazakhstan are ahead of Belarus with the average wages equaling $249,5 and $222 respectively. In Ukraine at the end of 2004 the average wage was $121,3, in Azerbaijan - $105, in Moldova - $97.

These high results were achieved due to the consistent macroeconomic policy and coordination of all bodies of the state management. At the same time, the Deputy Economy Minister thinks that it's high time for using competitive advantages of the country, namely high human and sci-tech potentials. Therefore an all-round harmonious human development based on the increase in incomes, qualitative improvement of healthcare, educational and cultural systems, housing construction and services are the priority areas of the country’s economy for the next few years, Tatiana Starchenko emphasized.

28/03/2005

PRESIDENT DECREES ON ENTREPRENEURSHIP SUPPORT

(on the information from Interfax)

The President of the Republic of Belarus Alexander Lukashenko signed the decree on “Urgent Measures to Support Entrepreneurship”.

Measures laid down in the decree are designed to increase the effectiveness of interaction between the state and private business, to resolve problems outlined by individual entrepreneurs in the taxation and renting fields, to create translucent conditions for entrepreneurship.

The decree simplifies the registration of goods imported from Russia and provides for introduction of a single commodity traffic accounting book to control tax payment.

To resolve problems individual entrepreneurs face with accessing credit resources, the National Bank was tasked to take necessary measures to improve credit accommodation for private entrepreneurs by July 1, 2005.

24/03/2005

PRIME MINISTER OF BELARUS UNDERLINES SUSTAINABLE DEVELOPMENT OF BELARUS’ ECONOMY

(on the information from Interfax)

The Prime Minister of Belarus Sergey Sidorski reported on the sustainable development of Belarus’ economy during the sitting of the EurAsEC Interstate Council in Astana on March 23.

The country’s consistent policy aimed at the gradual development of economy allowed to preserve the growth of the main macroeconomic parameters within the last nine years as well as secure the growth of individuals’ incomes, harnessing the unemployment rate, which provides for the stability of the Belarusian society, Sergey Sidorski said.

In 2004 the Belarusian GDP increased by 11% against 2003 and exceeded the level of 1990 by 15.8%. besides, GDP average annual increase within 2001-2004 made about 7%.

The Prime Minister underscored, the recent years have brought a boost in the investments to the country’s economy. According to him, the growth rate of capital investments in 2004 made 120.2% against 2003, upping to 21% of the country’s GDP.

According to Sergey Sidorski, in 2004 the Belarusian government paid most attention to the country’s financial rehabilitation of the real sector of economy. The sales profitability in Belarus increased from 10% in 2003 to 15% in 2004.

2004 saw the lowest consumer price index since 1991 (1.1% per month). Sergey Sidorski spoke of growing average salaries, which now make $200.

Belarus has taken its place in Europe’s top ten in foreign trade/GDP ratio. About half of the country’ make is exported.

The Belarusian Prime Minister stated, the aim of the country’s development is to further improve living standards of the population, efficiently employing human potential, technical retooling and perfecting the structure of economy and boosting its competitive strength.

He underscored, the fulfilment of the aim is impossible without the country’s active participation in the work of international organisations, especially the EurAsEC.

ON BELARUS-UNDP COOPERATION

(on the information from BelTA)

The activity of the UNDP Office in Belarus has become a significant factor promoting the achievement of social-economic targets. The UN/UNDP resident coordinator in Belarus and Lithuania Cihan Sultanoglu informed that the preparation of the UNDP third cooperation program for Belarus for 2006-2010 is nearing completion. It is being developed jointly with the Belarusian government. Among the document’s priorities is the socio-economic development of Belarus and the UNDP’s participation in this process emphasizing the establishment of solid relations between the government, civil society and private sector. The UNDP will contribute to the development of small and medium-sized business in Belarus. A serious component in the work will be the environmental protection. The financial assistance will be allocated for corresponding ecological projects and programs on the rehabilitation of Chernobyl regions. The UNDP Official expressed confidence that close cooperation with parliamentarians would allow to improve the results.

22/03/2005

BELARUSIAN INDUSTRIAL ENTERPRISES INCREASE EXPORTS TO NON-CIS STATES BY 40.2%

(on the information from Interfax)

In January 2005 Belarusian companies boosted the exports to the courtiers outside the Commonwealth of Independent States by 40.2% against the same period last year to $78.5 million, informed the Head of the Department of Foreign Affairs of the Ministry of Industry of Belarus Niklai Starodynov.

January imports hiked 62.2% to $35.8 million, surplus reaching $42.7 million.

The period’s biggest commodity turnover fell on Germany - $8.2 million worth of produce (a 87% increase), imports - $8.1 million (54% up). For the first time in five years Belarus has gained positive balance in trade with Germany.

The exports of the enterprises of the Ministry of Industry of Belarus to Poland made $4.5 million (2% up), imports - $4.1 million (31% up), to Italy - $4.6 million (56% up) and $1.1 million (5% down) correspondingly.

This January saw a 4.7-fold hike in the exports to the USA to $5.8 million, imports making $356 thousand (25% down).

The commodity turnover in trade with the United Kingdom skyrocketed, as exports grew 14 times to $4.6 million, imports – 2.7 times to $2.2 million.

18/03/2005

BELARUS ECONOMY EXPANDS 9.7% IN JANUARY-FEBRUARY

(on the information from Interfax)

The gross domestic product (GDP) of Belarus made BYR 7.7 trillion in real prices in January-February 2005, growing 9.7% on the year, according to the information of the Ministry of Statistics and Analysis of Belarus.

In January-February the specific weight of industrial added value in the GDP made 31.5%, agricultural added value – 2.5%, construction industry added value – 5.1%, transport and communications added value – 11.6%, trade and catering industry added value – 10.2%.

The industrial production output in January-February 2005 made BYR 8.7 trillion, 11.6% up on the year.

Over the period in question fuel industry output surged by 22.6% against January-February 2004, ferrous metallurgy – 11.8%, timber, woodworking, pulp and paper industry – 10.1%, food industry – 11.8%, construction materials industry – 17.1%, mechanical engineering and metal-working industry – 16.3%, chemical and petrochemical industry – 5.5%, light industry – 4.7%. Power engineering faced a 5.3% reduction of output.

Belarusian industrial companies increased production volumes of 307 out of the 610 most important types of produce in January-February 2005. As many as 1,505 companies (75% of their total number) increased production volumes, while 464 enterprises (23.1%) reduced production volumes.

As many as 646 companies revealed a 20% and higher increase in production output, at 277 companies the figure dropped by 20% and more.

12/03/2005

GDP OF BELARUS INCREASES IN JANUARY-FEBRUARY

(on the information from Interfax)

In January-February 2005, the gross domestic product (GDP) of Belarus grew 9.7% on the year, reports the Ministry for Statistics and Analysis.

Over the period in question industrial output went up 11.6%, agricultural – 12.2%.

Fixed-capital investments grew 23.4% on the year.

The output of consumer goods increased by 10.2%, including foods – 10.3%, non-foods – 10.1%. The growth of retail trade made 18.3%, for-fee services – 11.7%.

In January-February 2005, foreign trade (including trade in services) went up by 15.4% on the year, export – 20.5%, import – 9.7%.

In January the profit rate of sales of industrial products totaled 15.4%.

The government has set this year’s GDP growth target at 8.5-10%.

The IMF expects Belarus’ GDP to grow 5.5% in 2005.

In 2004 Belarus’ economy expanded 11% against a 6.8% rise in 2003.

10/03/2005

BELARUS GROWS GOLD, FOREIGN CURRENCY RESERVES IN JANUARY-FEBRUARY

(on the information from Interfax)

Belarus’ aggregate gold and foreign currency reserves (calculated under domestic standards) have grown 14% in January-February 2005 to reach $1.193 billion as of March 1 2005, reads the Statistics Report by the National Bank of Belarus (NBB).

Belarus saw its gold and foreign currency reserves grow 5.1% in February 2004 after a 20.1% dive in January.

As reported by the NBB, in January-February 2005 foreign currency deposits grew 19.6% down to $897.8 million, gold – shrinking by 14.4% to an equivalent of $126.2 million (27.9% up since early 2005). Other reserves accounted for $126.2 million as of March 1 2005, 27.9% up since early 2005.

In the meantime, Belarus’ international reserve assets (calculated in compliance with the IMF Special Data Dissemination Standard) went up by 23.2% over the two-month period to make $949.1 million as of March 1 2005. Under the SDDS, in February Belarus upped its gold and foreign currency reserves by 37% on the month after a 10% drop in January.

According to the NBB, the foreign currency reserves of non-residents grew 21.7% to $839.9 million, monetary gold reserves – grew 36.4% to an equivalent of $108.3 million.

The guidelines of the monetary and credit policy for 2005 provide for their $620-680 million growth within the year. By the year 2010 the NBB is planning to grow its gold and foreign currency reserves up to $3 billion. Now the NBB has 20.1 tonnes of gold in stock.

The National Bank of Belarus started calculating the gold and forex reserves according to the IMF pattern since April 1, 2004. The official reserve assets reflect the supply of highly liquid short-term assets placed with non-residents that can be used operatively. Other assets are less liquid and can be placed with residents, as well.

Belarus’ aggregate gold and foreign currency reserves (calculated under domestic standards) have grown 17.1% in 2004 to reach $1.047 billion. Belarus’ international reserve assets (calculated in compliance with the IMF Special Data Dissemination Standard) went up by 54.4% over the year to make $770.2 million as of January 1, 2005.

28/02/2005

GOVERNMENT REPORTS ON RESULTS OF BELARUS SOCIO-ECONOMIC DEVELOPMENT IN 2004

(press release by press service of the President)

On 25 February, President of the Republic of Belarus Alexander Lukashenko heard the report of the Council of Ministers on the results of socio-economic development of Belarus in 2004. The fact that 15 out of 16 major parameters of the prognosis of socio–economic development of Belarus were implemented in the past year received positive appreciation of the Head of State and he termed the work done by the Government as “close to satisfactory.”

The President is convinced that Belarus must regain the old markets and conquer new markets for the sales of its products. This task is being implemented, yet there is a no small potential to be materialized.

In view of Alexander Lukashenko, the main priorities of the country’s development for the next five years must be: harmonious development of man (implying health care, education, welfare growth), ensuring the principle of social justice, innovational development of economy, export capacity building, development of rural areas and energy and resources saving.

The President believes that over ten years of its existence the Belarusian model of the socially targeted market economy has proved its advantages relative to other models. Therefore, it must be comprehensively supported and developed.

21/02/2005

PRODUCTION GROWTH EXPANDS BY 13.3% IN JANUARY

(on the information from Interfax)

Belarus’ industrial output shot up by 13.3% in January 2005 bringing the total to BYR 4.4 trillion against January 2004, according to the information of the Ministry of Statistics and Analysis of Belarus.

Over the period in question, Belarus saw the highest increase in industrial production in the following sectors: fuel industry (26.1%), construction materials industry (24.6%), mechanical engineering and metal working (16%), food industry (14.1%), ferrous metallurgy (12.6%), forest, wood processing and pulp-and-paper industry (12%) and chemical and petrochemical industries (8%). Power engineering narrowed its output by 2.2%, while light industry upped by 4.4%.

In January 2005 Belarus generated 2.8 billion kWh of electricity, 4.5% up on January 2005. Oil production level went up 0.9% to 151,600 tons. The output of petrol went up 70.6% to 278,300 tons, diesel fuel – 18.5% to 514,500 tons.

The output of mineral fertilizers increased 15.8% to 594,300 tons, trucks – 1.6 thousand (1.8% up), buses – 73 items (30.4% up), refrigerators and freezers – 78.9 thousand (0.6% up), paper – 4.6 thousand tons (0.2% down), cement – 170.9 thousand tons (68.7% up). The output of fabrics went up 4.7% to 23.5 million square meters, footwear – 1.9% up to 9,202 thousand pairs.

The output of bread made 587,000 tons (18.6% down), vodka and liquors – 48,100 thousand decalitres (4.9% down).

16/02/2005

IMF to revise its 2005 growth, inflation forecast for Belarus

MINSK, Feb 16 (Prime-Tass) -- The International Monetary Fund (IMF) is likely to revise its forecast for Belarus’ economic growth and inflation in 2005, IMF’s Deputy Division Chief, European Department, Balázs Horváth, said answering Prime-Tass questions.

“The better-than-projected outturn in 2004 will likely lead to revisions for our forecast for 2005 and – depending on the macroeconomic policies pursued – beyond,” Horváth said.

According to him, the IMF has preliminary views and figures that it plans to refine following detailed discussions in Belarus between an IMF delegation, which is scheduled to visit Belarus in late March 2005, the Belarusian government and the National Bank of Belarus (NBB).

According to the data posted on the IMF’s official site, Belarus’ GDP growth was projected at 6.4% in 2004, while official sources said the GDP growth was at 11%. CPI rise was expected at 19.5% in 2005 by the IMF, but according to Belarus’ Statistics Ministry, CPI rose 14.4%.

The IMF sees CPI rise at 17.4% in 2005, while Belarus projects it only at 10%. At the same time, the IMF forecasts a 5.5% GDP growth, while Belarus sees it at 8.5-10%.

“During these discussions we will benefit from learning the views of our Belarusian counterparts and will be able to ascertain the likely path of fiscal and monetary policies, of structural changes and reforms, as well as other key factors driving growth, inflation, and the balance of payments,” Horváth said.

He called the influence of the Russian economy on that of Belarus a significant impact, which “arises through several channels, most notably through trade, financial relations, and institutional developments.”

“It [Belarus] receives a large part of imports – of fuels, metals and other critical inputs, some at prices markedly below those prevailing on the world market – from Russia,” Horváth said, meaning the advantageous position of Belarus as Russia’s trade partner.

According to him, Russia's influence on economic developments in Belarus through tax policy changes has been a subject of much recent debate when the change to the destination basis for collecting VAT was made from January 1, 2005.

“Similarly, Belarus will be affected by Russia's WTO accession. This, together with real exchange rate developments where the ruble exchange rate and relative price and wage developments play key roles, could significantly affect the competitiveness of Belarusian goods on the Russian market,” Horváth said. End

13/02/2005

Belarus’ GDP up 10.4% on year in Jan to 3.827 trillion rubles

MINSK, Feb 11 (Prime-Tass) -- Belarus’ gross domestic product (GDP) increased to 3.827 trillion Belarusian rubles as of February 1, 2005, up 10.4% on the year in January, an official with Belarus’ Statistics Ministry told Prime-Tass Friday.

Industrial output in January amounted to 4.353 trillion Belarusian rubles, up 13.3% on the year.

Agriculture output as of February 1, 2005, stood at 411 billion Belarusian rubles, up 12.7% on the year in January.

The Belarusian government had set the GDP growth target at 8.5-10% for 2005, industrial output at 8-9.5%, agriculture output at 8-9.5%.

GDP increased to 49.445 trillion Belarusian rubles as of January 1, 2005, up 11% on the year in 2004. Industrial output in 2004 amounted to 47.176 trillion Belarusian rubles, up 15.6% on the year.

Agriculture output as of January 1, 2005, stood at 11.390 trillion Belarusian rubles, up 12.9% on the year in 2004. End (2,169 Belarusian rubles – U.S. $1)

Belarus posts consumer price index up 0.7% on mo in Jan

MINSK, Feb 11 (Prime-Tass) -- Belarus’ consumer price index (CPI) went up 0.7% on the month in January, compared with a rise of 2.1% in December, an official with Belarusian Statistics Ministry told Prime-Tass Friday.

Food prices went up 1% on the month in January and 2.8% on the month in December; non-food prices increased 0.3% on the year in January and 0.3% on the month in December, while prices for consumer services rose 0.4% on the month in January and 2% on the month in December.

According to the government’s forecast, Belarus’ CPI rise was not to exceed 14% on the month in January and 10% in 2005.

CPI rose 14.4% in 2004 against 25.4% in 2003. End

10/02/2005

PM says Belarus’ GDP grew 10.4% on year in January

MINSK, Feb 10 (Prime-Tass) -- Belarus’ gross domestic product (GDP) grew 10.4% on the year in January, Belarus’ Prime Minister Sergei Sidorsky said during a meeting with President Alexander Lukashenko Thursday.

Industrial output rose 13% on the year in the period, and agricultural output increased 12.7%. “All industrial programs have been carried out in full,” Sidorsky said.

According to preliminary data, inflation rose 0.8% on the month in January, Sidorsky said.

Sidorsky also reported to Lukashenko that the government had taken due measures to settle the problems caused by the new VAT collection procedure earlier this year. “The largest companies of the country, including oil and woodworking sectors, managed to reach the planned supplies volumes,” the premier said.

Belarus GDP growth in 2005 is expected at 8.5-10% on the year to 58.5-59.9 trillion Belarusian rubles, while GDP’s energy capacity is to decrease 5-6% on the year.

Industrial output is to rise 8-9.5% in 2005, agriculture output is to increase 8-9.5%, and consumer goods production is to rise 9.5-11%. Capital investments are to go up 15.5-17.5% on the year in 2005 to 13.5-14.3 trillion Belarusian rubles. End (2,169 Belarusian rubles - U.S. $1)

Belarus’ govt wants corporate institutions to lead country’s devt

MINSK, Feb 10 (Prime-Tass) -- The Belarusian government believes corporate institutions should play a more active role in the social and economic development of the country, Deputy Economy Minister Andrei Tur told a seminar for corporate institutions Thursday.

“The government wants corporate institutions not only to participate more actively in the development of the national economy, but also to lead the expansion process,” Tur said.

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economy

IMF: NEW VALUE ADDED TAX SCHEME BENEFICIAL TO BELARUS' ECONOMY

IMF: BELARUS HAS BASIS FOR MARKET ECONOMY STATUS

BELARUS TOPS LIST OF BEST CIS INDUSTRIAL PERFORMERS IN JANUARY-FEBRUARY

GDP of Belarus in 2004 Is 15,7% Higher Than in 1990

PRESIDENT DECREES ON ENTREPRENEURSHIP SUPPORT

PRIME MINISTER OF BELARUS UNDERLINES SUSTAINABLE DEVELOPMENT OF BELARUS’ ECONOMY

BELARUSIAN INDUSTRIAL ENTERPRISES INCREASE EXPORTS TO NON-CIS STATES BY 40.2%

BELARUS ECONOMY EXPANDS 9.7% IN JANUARY-FEBRUARY

GDP OF BELARUS INCREASES IN JANUARY-FEBRUARY

BELARUS GROWS GOLD, FOREIGN CURRENCY RESERVES IN JANUARY-FEBRUARY

PRODUCTION GROWTH EXPANDS BY 13.3% IN JANUARY

IMF to revise its 2005 growth, inflation forecast for Belarus

Belarus’ GDP up 10.4% on year in Jan to 3.827 trillion rubles

Belarus posts consumer price index up 0.7% on mo in Jan

PM says Belarus’ GDP grew 10.4% on year in January

Belarus’ govt wants corporate institutions to lead country’s devt