Belarusian Economy in the First Half of 2005

Belarusian Economy in the First Half of 2005

Over the recent years, the Republic of Belarus has steadily outperformed CIS and European countries in terms of economic growth rates.

In the first half of 2005, Belarusian economy performed well enough and, compared to the first half of 2004,

– GDP grew 8.9 percent;

– industrial production rose 10.5 percent;

– agricultural production rose 10.1 percent;

– consumer goods production increased by 10.2 percent;

– capital investments grew 119.1 percent;

– foreign trade of goods and services grew 10.6 percent, including the growth of exports of goods and services by 19.5 percent;

– for the first time over recent years, Belarus reached surplus in foreign trade of goods in the amount of $294.4 million.

Significant economic growth and its beneficial effect on the social development of the country were acknowledged by the World Bank in the country economic memorandum “Belarus: Window of Opportunity to enhance competitiveness and sustain economic growth”, dated June 10, 2005. In particular, it is stated in the document that the benefits from recent growth were broadly shared by population. The World Bank found that the structure of economic growth in Belarus is not characteristic for the countries with economies in transition, and the population in Belarus benefited more than in neighboring countries. These conclusions objectively prove the progressive character of human development in Belarus.

A number of socio-economic indicators place Belarus favorably among other CIS countries and countries with economies in transition as a whole. In particular, the level of unemployment, which was at the end of June 2005 at the level of 1.7 percent of the number of economically active population, is the lowest among the countries of CIS and Eastern Europe.

Recent report by International Monetary Fund (IMF) on economic situation in Belarus has also positive assessment of economic development of Belarus. IMF Survey dated August 1, 2005 states that stable economic growth is experienced by Belarus thanks to policies aimed at raising incomes. IMF experts concluded that inflation was halved during 2004 and further slowed in April 2005, aided by a balanced budget, exchange rate stability, and continued remonetization on the back of rising trust in banks and the national currency. Besides, international reserves rose, Government debt is low and current account deficit was reduced in early 2005.

Food and Agriculture Organization of the United Nations (FAO):

– against a background of decrease of per capita agricultural production in developed states of Western and Central Europe and CIS countries, notes stable tendency of increase of this indicator in Belarus;

– per capita agricultural production in 2003 (basic figure was the volume of production in 1999-2001) made up 110,8 percent in Belarus;

– Belarus, on equal terms with developed countries, is among the states where the share of undernourished population is less than 2.5 percent.

According to the UNDP Human Development Report 2005, Belarus remained the leader among CIS states in terms of education and health and takes the lead over a number of developed countries on several indicators in these fields.

In particular, Belarus:

– yields only to 12 out of 57 countries from high human development group in terms of public expenditure on education (6 percent of GDP);

– takes the lead over all CIS countries in terms of adult literacy (99.6 percent) and youth literacy (99.8 percent);

– passes 22 out of 57 countries from high human development group in terms of public health expenditure (4.7 percent of GDP);

– is the first among CIS countries in terms of health expenditure per capita (PPP $583) and spends on health more than 10 countries from high human development group;

– in terms of the number of physicians per 100,000 people (450 physicians) surpasses all CIS countries and all but 3 countries (United States, Italy, Cuba) from high human development group;

– has the best among CIS countries indicators of infant mortality rate (13 per 1000 live births) and under-five mortality rate (17 per 1000 live births);

– the indicator of population undernourished in Belarus (2 percent) is lower than in all CIS countries and 14 countries from high human development group.

According to United Nations Conference on Trade and Development (UNCTAD) report “The Digital Divide: ICT Development Indices 2004”, Belarus is in 55th position in the world and leads other CIS countries in terms of information and communication technologies spread.

According to the UN Economic Commission for Europe, (Economic Survey of Europe 2005, No. 1), Belarus has seen a 22.1 percent increase in industrial production between 1989 and 2003, with only Turkey and Uzbekistan ahead in the targeted region. The average figure for the same period for CIS is minus 30.6 percent.