While the international financial organizations are predicting a slowdown in the growth of Belarus ‘ GDP, economists insist on the urgent search for support for its acceleration. Without this, the domestic economy will continue to stagnate and more and more detached from the countries of Central Europe and the Baltic States.
Photo: Reuters
That will help to grow the economy more actively, experts discussed at the seminar “From stability to economic growth: prospects for Belarus”.
How not to get stuck in stagnation?
The most successful in this respect, Belarus was 2003-2008, when the potential growth increased. But from 2008 to 2013 he slowed down. But in recent years, almost froze, said a senior researcher at the Belarusian economic research and outreach education center Dmitry Kruk. The average growth that the economy can generate in its current state and in the absence of external risk is 2%.
But at this rate of growth to be successful and to ensure macro stability in the domestic economy has no chance. It will be more and more detached from the countries of Central Europe and the Baltic States, which, according to the economist, Belarus should rely on.
— Growth of the last seven years is clearly insufficient in order to maintain the status quo. Moreover, we have significantly downgraded their relative positions. Went out of sync with these countries, — said Dmitry Kruk.
If the domestic economy continues to grow at its current pace, the actual level of welfare will deteriorate in comparison with its Western neighbors.
— Belarus is steadily poorer country. This in itself is a threat because it makes it impossible to form a virtuous circle. A virtuous circle is obtained if we have high growth. And due to the strong growth we are creating the prerequisites for future growth. And they, in turn, stimulate growth, — explained the expert outreach.
Dmitry Kruk for several years speaks of the importance of accelerating economic growth. According to him, to get on the path of rapid development of Belarus for 10 years need to grow 6-7% per year.
— If we want by 2030 to be on a par with the Czech Republic, all the remaining years of average growth should reach 7.6 percent. If you want to catch up with Poland by 2050, this growth may reach 3.2 percent — said Dmitry Kruk.
The expert adds that with the growth of about 2% per year Czech Republic, Latvia, Lithuania, Slovakia, Belarus does not ever catch up, and to catch up with Poland, it will take 246 years.
But even if you do not think about the competition with more successful countries, increasing economic growth is extremely important for its sustainability.
Healthy normally functioning economy is the basis of stability of the national currency, said the head of research of the national Bank Natalia Mironchik.
— Growth is low and unstable. Need as soon as possible to take significant steps to increase. But I would not want to repeat the mistakes that was in 2011 — I would not like to step on the same rake, — said the representative of the national Bank.
In recent years slowed potential growth. The output gap is around zero, which indicates the balance of the economy. And to stimulate economic growth from the demand side to anything. The national Bank opposed the stimulus from monetary policy. It warmed up would demand, and with it would accelerate inflation, led to instability in the currency market, lowered the level of income.
— Is now extremely important measures from the supply side. Long-term growth depends on such key factors as labor, capital, technology, organization of production. And the necessary measures that will affect these components, — said Natalia Mironchik.
Due to what to grow?
The recipes of economic growth that were used in the 2000-ies (investment in fixed capital, the excessive role of the state in the distribution and accumulation of investment and the sacrifice of price and financial stability for the sake of growth), will not bring the desired effect. Even seemingly successful tool of capital accumulation began to interfere with the performance because the rate on capital accumulation and economic focus of the authorities on the mechanism for the distribution of investment has led to the imposition of restrictions on financial market, the normal functioning of labour markets and goods and services.
Deep and lasting economic growth capable of providing higher productivity and improved utilization of resources.
— To return to sustainable growth and to improve, we have to think about performance, but about the capital, we still can forget. If we will increase performance, there is not enough capital, it will grow in the power of the market — said the expert outreach.
But over the last 10 years, the performance practically not increased. Partly because the government cares about the companies with the lowest performance are growing less efficient industries and firms.
For productivity growth is an important macro stability, more effective governance, providing financial intermediation, the quality of education, product markets, competition policy, infrastructure and openness, as well as technological equipment, concluded Dmitry Kruk.
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