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Report of the Government and the National Bank on the economy performance in 2012

The President of Belarus Alexander Lukashenko met with the members of the Government and the National Bank to receive the report on the economy performance in 2012, evaluate the year-end results and the budget and monetary policy forecasts for 2013. 

Prime Minister of Belarus Mikhail Myasnikovich explained that the country’s economic performance in January-July 2012 has created crucial macroeconomic preconditions to meet the 2012 targets and secure economic growth. The commodity export rose by 34%, the foreign trade surplus was estimated at $3.6 billion. The net foreign currency earnings exceeded $3.4 billion. The number of loss-making companies reduced by 14.5%. Some 553 social facilities are being built. 

The Premier noted that in order to meet the GDP growth targets, the gross regional product should be considerably expanded in Brest, Grodno and Gomel oblasts; Bellegprom Concern and Bellesbumprom Concern, the Architecture and Construction Ministry and the Industry Ministry should also intensify their efforts to meet the major targets. 

As for the 2013 targets, they are closely related to the 2012 targets. 

The GDP growth should make 8.5%, the export of goods and services should increase by 15.2%, the foreign trade surplus should make up 0.7% of GDP or $500 million, capital investments should expand by 6%, commissioning of new houses – 6.5 billion square meters. 

In 2012 Belarus advanced to 15 new markets, including Sudan, Laos, Paraguay, the Congo, Chad, Togo, the Bermudas. The exports to the new markets made up $335 million over the seven months this year. However, the government demands more efforts to penetrate new markets. 

In order to achieve targeted trade surplus and GDP growth, Belarus will have to export 65% of industrial products and 20% of agricultural goods in 2013. According to the Prime Minister, export accounts for 84% of Belarus' GDP. This means that the economy is open. Just to compare: export makes 13% of GDP in the United States, 22% in India, 27% in China, about 30% in Russia and Great Britain, 42% in Poland, 50% in Ukraine. However, as opposed to Belarus, these countries can stimulate the economy by boosting domestic demand. 

The government is planning to meet 2013 targets by fulfilling five basic conditions. First, labor productivity should outstrip growth rate of real salaries (109.3% and 107.1% respectively). Second, there should be foreign trade surplus in goods and services of at least 0.7% of GDP. The third condition is a deficit-free budget without the increase in domestic debt and emission to finance current expenses. Fourth, the refinancing rate should be higher than the inflation rate. Fifth, the country should raise at least $4.5 billion in foreign direct investment. 

In 2013 export should generate almost two-thirds of the GDP growth. The government proposes to set out the export growth target to each business entity with a share of state ownership. These parameters are linked with regional-country targets which have been set out to Belarusian foreign establishments. 

In 2013, Belarus is set to export $53 billion worth of goods, well above the $45 billion targets in 2012. Given that the share of the manufacturing industry in merchandise exports is 90%, it will lay the crucial role in implementing the export strategy. Therefore, the budget appropriations in 2013 for export promotion will be three times as much as in 2012. On 1 January 2013, the VAT refund from the budget for exporters will be facilitated. Exports of agricultural products are projected to increase by 12%: from the expected $4.8 billion in 2012 to $5.4 billion in 2013. 

In 2013 Belarus will raise record high investments in the amount of $20 billion, of which 23% will be provided in form of bank loans. Taking into account the high interest rates on loans, the 2013 budget will have necessary funds to make them cheaper. All companies, which have a promising project and fulfill plans of comprehensive modernization, will have access to the resources to make loans cheaper. 

According to the Chairperson of the Board of the National Bank Nadezhda Yermakova , the major goal of the monetary policy in 2013 is to support price stability in the economy. Not least important is to increase the gold and forex reserves to the level that ensures economic security of the country. Gold and foreign exchange reserves are projected at $8.7 billion next year taking into account the five-year plans to increase their reserves to the volume of the three-month import with due consideration of its growth. 

The exchange rate will remain flexible basing on the demand/supply at the domestic currency market. The National Bank of the Republic of Belarus will carry out interventions both in the currency purchase and sale only to curb short-term sharp fluctuations.