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Capital investment in Belarus’ economy up 13% in 2011

MINSK, 28 February (BelTA) – In 2011, Br90 trillion worth of capital investments were put into the economy of Belarus, which was up 13% from 2010, Economy Minister Nikolai Snopkov said at the session of the Presidium of the Council of Ministers which reviewed investment activities in 201 and targets for 2012.

The proportion of investments in machinery, equipment, construction and installation works was hovering around 44% of total investment. Yet, the efficiency of investments remains low, Nikolai Snopkov said.

Last year 1 dollar of investments resulted in 22 cents of GDP growth as against 1.41 dollar in 2005. The highest return on investment is in trade, although it has declined in recent years. Return on investment in agriculture has remained low for a number of years. Last year return on 1 dollar invested in the industry was only 2 cents. The efficiency of investment in construction industry has dropped as well. For the last three years 1 dollar has resulted in $3.2 of value added growth on average.

This tendency testifies to the lack of efficient projects and emphasizes the need to increase the investment in the fixed assets in use. According to Nikolai Snopkov, funding resources for capital investment accounted for over 25% of the total over the last three years. Last year their share, together with foreign credit lines and loans from foreign banks, exceeded 34%, despite the reduction of emission credits.

On the whole, 1.2 ruble of loan resources accounted for 1 ruble of net revenue in 2011. In 2006 this correlation was 62 kopeks. The situation shows that government bodies use market mechanisms and alternative investment resources insufficiently, Nikolai Snopkov said. “In choosing funding resources for projects, preference is given to soft loans under government guarantees,” the minister added.