Trying to achieve the impossible economic performance, the government might have the economic situation deteriorating
On April 23rd, the Council of Ministers Presidium summed up the socio-economic development performance in Q1 2013.
The original GDP growth plan has been overestimated and is not implemented. The economic situation, despite the GDP growth by 3.5%, is qualitatively worse. Administrative measures used to stimulate the GDP growth had only short-term impact, deteriorating the situation in the medium term.
In Q1 2013 GDP growth was 3.5%. The original GDP growth plan for 2013 at 8.5% was overestimated, as the economic performance shows. In Q2 2013 the economic growth will continue declining due to high baseline of 2012, when Belarus was carrying out innovative schemes.
The desire to fulfill the GDP growth forecast without taking into account the international economic situation has resulted in deterioration of quality indicators. In Q1 2013 the stocks were piling up and increased by more than BYR 10 trillion, already exceeding the growth for entire 2012. In addition, the actual volume of stocks is clearly understated, because part of the goods are shipped to dealer warehouses in Russia and do not show up in the statistics.
Accounts payable in March 2012 to February 2013 have increased by 33%, receivables - up to 40%. The share of overdue payments in the total amount of existing debt has increased. During the year foreign receivables increased by USD 1.5 billion, which implies there are problems with export sales. Net economic output in January-February 2013 decreased by 34.3%compared with the same period in 2012.
Methodological amendments to the economic indicators’ calculation made in 2013 enabled to show economic improvements, but their impact will be limited in time. Effects from increases in net taxes on products on GDP growth in January 2013 were 3.8 percentage points, but in Q1 2013 the GDP growth slowed down to 1.7 percentage points with a clear further downward trend. The growth of investment in fixed assets was due to the changes in the accounting methodology for construction and installation works and has local impact. The distortion of statistical data results in loss of understanding about the real state of affairs in the economy and prevents the ability to implement urgent measures to remedy the situation.
Thus, the desire to achieve the impossible economic performance by any means results in economic imbalances and deteriorates the quality indicators for both, individual companies and large industries. Nevertheless, the government will continue stimulating the economic growth, provoking economic crisis in the medium term.
The Belarusian authorities regard the Catholic conference as yet another international event to promote Minsk as a global negotiating platform. Minsk’s proposal to organise a meeting between the Roman-Catholic Church and the Russian Orthodox Church is rather an image-making undertaking than a serious intention. However, the authorities could somewhat extend the opportunities for the Roman-Catholic Church in Belarus due to developing contacts with the Catholic world.
Minsk is attempting to lay out a mosaic from various international religious, political and sportive events to shape a positive image of Belarus for promoting the Helsinki 2.0 idea.
Belarus’ invitation to the head of the Holy See for a meeting with the Patriarch of the Russian Orthodox Church should be regarded as a continuation of her foreign policy efforts in shaping Minsk’s peacekeeping image and enhancing Belarus’ international weight. The Belarusian authorities are aware that their initiative is unlikely to find supporters among the leadership of the Russian Orthodox Church in Moscow. In Russia, isolationist sentiments prevail.
In addition, for domestic audiences, the authorities make up for the lack of tangible economic growth with demonstrations of growth in Minsk’s authority at international level through providing a platform for religious, sportive and other dialogues.