The official economic forecast for next year the government should do more intense, but for failure to meet targets for this year can be dismissed. If it comes to this?
The government is going to step on a rake?
After the high profile meeting with participation of heads of state held last Thursday, Prime Minister Sergei Rumas told reporters that the forecast documents for 2020 will have to redo it.
“The head of state considered the government’s plans are not sufficiently strained by 2020, and the package of documents sent back for revision”, — said Sergey Rumas. However, he suggested that “we, along with all government agencies to critically approach the numbers of the forecast, will make them more tense”.
Actually, “intense” scenario has already been considered by government and in August was rejected. Then the economy Ministry has submitted to the Council of Ministers two scenarios of socio-economic development to 2020: baseline, suggesting a moderate GDP growth (2.5%), and target (with GDP growth of 5.8%) for the implementation of the five-year plan.
The economy Ministry has shown that a natural way to ensure economic growth for the target scenario will not work because there are no sources for this.
According to Ministry of economy for GDP growth in a natural way (through external demand) exports to grow by 11% to $ 46 billion. While the economy has come to the conclusion that in the conditions of limited volumes of commodity exports (oil, petroleum products and potassium) such increase shall be provided solely by the growth ($4.3 billion) non-oil exports.
But such a high growth rate of non-oil exports in Belarus during the last decade are observed. The maximum growth of non-commodity exports of Belarus has achieved in the years 2010 and 2011 — the annual non-oil exports grew by $ 2 billion. This contributed to a sharp devaluation of the Belarusian ruble (nominal effective exchange rate in 2011 decreased by 57.2% in 2012 to 72.3 percent).
For 2020, no one in the government does not expect any sharp devaluation of the Belarusian ruble, nor superlogarithmic the external environment. On the contrary, there are predictions that in terms of trade wars between major world economies next year possible recession.
The government, seeing no sources to accelerate the economy, in August this year came to the conclusion that to disperse it in a natural way (through export growth) in the coming year will not work, and have been associated with this very modest forecast of the Council of Ministers on economic growth (2.5%).
However, President, this problem was not enough intense, and the government was instructed to prepare a “more intense” indicators for the next year and to ensure economic growth at the planned level (4%) this year.
“Are not met the development parameters for 2019, all responsible — from the Prime Minister — will go to rest”, — warned the government on Thursday Alexander Lukashenko.
If it comes to the resignation of the current government, which operates a total of 13 months? Or, to stay in seats of economic power will be artificial (administrative) to ensure fulfillment of targets at the expense of money issue?
Apparently, will not. From a project officially forecast, which the government has prepared for the year 2020 shows that the economic authorities are aware of the risks of using old methods of economic management, and on the rake do not want to go.
According to the Ministry of economy, if the economy to achieve the targeted economic growth is to pour 10 billion, this path is fraught with unwinding inflation-devaluation spiral. Unlikely that the current government wants to bring the country to it, experts say.
Cause for concern
Observers note that the challenges of economic growth facing the government in 2019 and 2020, most likely, will not be fulfilled.
“Theoretically, the only factor that can lead to acceleration of GDP, the completion of the construction of a nuclear power plant. Other preconditions for the acceleration of GDP in 2019-2020 is not visible,” — said in comments to senior analyst “Alpari” Vadim Iosub.
Evaluation international financial institutions, he added, saying that the growth of the Belarusian economy in the region of 2.5% is the maximum that can be obtained without structural reforms.
“Therefore, unlikely to comply with more strenuous plans for economic growth, to prepare which the government demanded the President”, — said Vadim Iosub.
Similar estimates shared by other experts.
“The original goal for GDP growth is 4% for this year seemed unrealistic, and now can not see the drivers that will allow you to run the official forecast. However, given election year, the reaction to the failure of the plans of the head of state followed a strict,” — said researcher at the Belarusian economic research and education center (outreach) Maria Akulova.
According to observers, there is no reason to change the government because of the failure of targets.
“The current economic team is the most professional in the history of Belarus, and to find a worthy replacement to the first persons of the Council of Ministers and the national Bank will be difficult,” — says Vadim Iosub.
The same opinion is shared by other observers.
“The last two composition of the Council of Ministers compared to previous governments is different in that they are able to maintain financial and price stability in the country. Therefore, it is not clear to whom and for what to change the current government”, — said Mariya Akulova.
Observers raised concerns the words of the head of state is not so much about a possible resignation of the government as criticism of his economic policies. They say that the government clings to stability, and money from common man is not more.
“If in favor of targets to sacrifice stability, it is possible to obtain a high rate of economic growth, and then the deterioration of the welfare of the population. It is possible to disperse the salaries of 500 to 600 dollars and then they will drop to $ 350. That Belarus has repeatedly passed”, — recalls Vadim Iosub.
However, experts hope that this option will be avoided. First, because the current government is aware of such risks. Secondly, due to the fact that Belarus is full of problems, and not the time to experiment with economic policies.
“Negotiations with Russia are very difficult. On no major issue the parties have not yet agreed, although the agenda is extensive — the price of gas, the conditions of oil supplies, compensation for tax reform, economic integration. Most likely, these issues will not be resolved before the end of the year, and they will move to the year 2020”, says Maria Akulova.
It is therefore possible that in the beginning of the new year the President will be more important issues the government’s resignation.
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