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from 09.08.2016

Andrei Kobyakov held a meeting of Council of Ministers of the Republic of Belarus

There are positive recovery signs in the Belarusian economy, Belarus’ Prime Minister Andrei Kobyakov said when speaking at a government conference to discuss the H1 performance and the measures to achieve the 2016 goals.

“We already know the H1 results and we are not satisfied with them. But it is fair to point out that there is a healthy recovery trend. We strictly follow the established rules, live within our means. The economy is balanced, social guarantees are fulfilled,” Andrei Kobyakov said. In comparison with January 2016 the GDP expanded by 1.9 percentage points and amounted to 97.5% in the first six months. This is below 100.1% that we were aiming, but still, the H1 dynamics was positive,” the Prime Minister said.

Andrei Kobyakov stressed that the recovery trends are seen in most industries. “The manufacturing adds monthly. So, the industrial production index increased by 5.2 percentage points and amounted to 98.4% at the end of H1. Agriculture rose from 100.9% to 103.3%. The transport sector added a lot: cargo turnover excluding pipeline transport rose from 90% at the beginning of the year to 100.9% at the end of June,” the head of government said. Labor productivity increased from 97.3% to 99%.

In H1 Belarus honored domestic and foreign commitments in foreign currency in full without reducing the level of its international reserves. In January-July the amount of gold and foreign exchange reserves increased by $0.5 billion to total $4.6 billion as of 1 August.

“The domestic currency market is stable. The country demonstrates a positive balance between foreign currency demand and supply. The population sold more than $630 million over the period under review. It was thanks to a flexible exchange rate policy. The free exchange rate formation mechanism allowed us to keep up with the fluctuations in the currency of Russia, our main trading partner. We acted the way we decided at the beginning of the year. The Belarusian ruble weakened against the U.S. dollar by 8%, mainly due to an unfavorable foreign situation at the start of the year. The Russian ruble currently sits within the average annual forecasts. We planned Br297 (non-redenominated) per one Russian ruble for this year,” the Prime Minister said. In his words, such a policy provides a solid footing for companies on the Russian market.

He also said, that state support helped the companies affiliated with the Industry Ministry increase output.

“Support provided to the companies of the Industry Ministry during this complicated period helped them increase the output by 0.7% over 2015 and 1.4% in January-July 2016. Backlog of inventories were reduced by almost Br2 trillion (non-redenominated),” Andrei Kobyakov said.

In his words, the number of loss-making companies has been steadily decreasing. “In January-June the number of such enterprises contracted by 31%. Their number, however, remains high, 1,738 companies (1,393 companies in 2015). Despite an 8% decrease in the number of loss-making companies in the Industry Ministry, the aggregate losses are, mainly, generated in the industry sector, which is 46%,” Andrei Kobyakov said.

The Prime Minister stressed that the government has been consistently implementing the financial recovery program in all sectors of the economy, without increasing the money supply. Last year, increased attention was paid to the problems of mechanical engineering, processing and light industries. “This year we are keeping an eye on agriculture. The decrees defining the mechanisms for the financial recovery of agricultural organizations were enacted in July. We will make full use of the tool to mange the assets of the most troubled enterprises through the new Asset Management Agency,” he said.

The next in line are processing enterprises of the agricultural industry. “A draft decree on the development of such enterprises in Vitebsk Oblast has been submitted to the head of state. Simultaneously, work is under way in Gomel and Minsk Oblasts. In fact, the regional authorities have been given additional time and opportunity, if you want a respite, to sort things out on a systematic basis, and launch a self-reproducing mechanism of recovery of agricultural enterprises,” the Prime Minister said.


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