The foreign trade deficit is expected to shrink to about 7% of GDP in Belarus by the end of 2011, Deputy Economy Minister of Belarus Alexander Yaroshenko told a briefing on 22 September, BelTA has learnt.

The priorities of Belarus’ foreign economy policy include the further reduction of the foreign trade deficit, the Deputy Economy Minister emphasized. “We believe that we will be able to bring it down to about 7% of GDP by the end of the year,” Alexander Yaroshenko said.

A significant improvement in the foreign trade to GDP ratio was a remarkable achievement of Belarus’ economy in January-July 2011. Over the seven months, the figure reached minus 8.1%, while the forecasts put in at minus 8.9-9%. The deficit in foreign trade in goods and services was growing slower all over the period and reached $2.65 billion. In July Belarus posted a trade surplus of $380 million.

The commodity export remains record high - $3.7 billion. In July it even outpaced import. Therefore, in July Belarus posted a surplus in commodity trade of $167.5 million for the first time this year. The export growth keeps gaining momentum. In July it boasted 14.9 percentage points (165% vs. 150.1%).

In January-July the import of cars contributed 50% to the deficit in foreign commodity trade. After Belarus introduced single customs tariffs on 1 July, the import of cars nearly came to a standstill with merely $35.7 million.

According to the Economy Ministry, the social and economic development in January-August 2011 is marked by a gradual slowdown of economic growth, which started in June. This is the result of the government policy to reduce domestic demand and eliminate existing economic disproportions. The main contribution to Belarus’ GDP is made by the manufacturing industry and trade, while the construction industry is becoming less important because of the decline in housing construction.

The majority of key parameters, including GDP, exceed annual targets. However, in January-July some parameters shifted into low gear. In January-August 2011, qualitative indicators remain high. Labor productivity went up by 9.8%, returns on sales in industry reached 11.7%, in agriculture – 7.5%, GDP energy intensity slimmed down by 7.7%.

In January-August the industrial output rose 11% over the same period last year. The manufacturing industry showed the most rapid growth - 12.5%. In January-August 2011 the production of coke, oil products and nuclear materials accounted for over 36% of the country’s industrial growth. Their output went up by 22.3%. The manufacturing of vehicles increased some 33.3%, pharmaceuticals – 18.2%.

The pace of steady growth has been posted in the manufacturing industry after its contraction in April-July. The fact indicates certain stabilization tendencies in the manufacturing industry amidst the crisis at the foreign currency market. Timely measures to redirect the production to outside markets proved efficient as industrial export showed sustainable growth. This year’s figures demonstrated strong performance of the national industry. In January-July 2011 labor productivity in the industry went up by 8.1%. The margin on sales was on the rise, too. Over the period under review, it climbed 11.7% (10.9% - in January-June). The amount of loss-making companies reduced to 12.8% (14.6% in January-July 2010).

In January-August 2011 the country saw an increasing export of innovative products: from 10% in January to 16.9% in January-August this year. The highest figures were registered in the production of machinery and equipment (innovative products account for 37.3%), transport vehicles and equipment (45.9%), electrical and optical equipment (20.6%).

The inflow of capital investment has slowed down due to measures towards a well-balanced development. The growth in May was attributed to the devaluation of the Belarusian ruble and an increase in investments due to difference in the exchange rates in the foreign currency contracts signed earlier. The tendency remained the same in June-August. Expenses on the acquisition of machinery, equipment and transport vehicles in the total capital investment stood at the level of 41%. Investment for these purposes increased by 24% as compared to the same period last year. FDI inflow remained poor. In January-August 2011 the industry received $1,141.2 million of FDI, which is only 17.6% of the annual projections.

The fiscal performance in January-July 2011 was accompanied by high sales revenue as well as a strong margin on sales that went up by 3% on the same period last year and made up 9.4%. With this, the price index of the producers of industrial goods soared 72.9% as against July 2010. As of 1 August 2011 the credit debt leapt 75.1% in comparison with the same time last year, debit indebtedness increased by 63.2%. As of 1 August 2011 there were 720 loss-making companies, or 8.2% of the total.

Belta