Belarus's GDP achieved the highest growth rate in the last 10 years in January-May

Sales profitability in the republic's industry in January-April 2011 reached 7.7%. The net profit earned by organisations over the four months of the current year is 65.8% higher than in January-April 2010. The number of loss-making organisations over the four months of the current year decreased by 4.8% compared to the same period in 2010. A growth trend in the share of shipped innovative products in the total volume of shipped products is noted: 10% in January, 11.8% in January-March, and 12.7% in January-May. The highest levels are observed in the machine-building industries: production of machinery and equipment (34.6%), transport vehicles (43.6%), electrical equipment, electronic and optical equipment (21%). Against the backdrop of production growth over the five months of 2011, a stable situation is characteristic regarding the ratio of finished goods inventories to the average monthly industrial production volume. As of June 1, 2011, the inventory volume amounted to Br7578 billion, or 54.7% of the average monthly production volume. Agricultural production is characterised by a slowdown in growth rates (from 106.1% in January to 102.9% in January-May 2011). The decrease in agricultural production volumes is primarily due to a reduction in livestock production (a decrease from 104.2% to 103.5% compared to January-April of the current year). The decrease is also due to a reduction in milk production from 101.8% in January-April to 100.8% in January-May, eggs - from 108.3% to 107.1% respectively, and the production (rearing) of cattle and poultry - from 105.7% to 105.4%. Milk production growth occurred solely due to an increase in livestock numbers. Milk yield per cow decreased by 21 kg compared to the corresponding period last year, amounting to 1880 kg. In organisations engaged in agricultural activities, crop production decreased by 6.7%. The decrease is primarily due to low rates of grass forage harvesting. In households, a continued fall in production volumes (93.4%) is observed, which is linked to a decrease in the number of cattle, pigs, sheep, and poultry. Compared to the four months of 2010, financial performance indicators in agricultural production have significantly improved: profit from sales increased 3.2 times, net profit increased 1.6 times, the sales profitability rate was 7.2% (3.1% in the four months of 2010), and the share of loss-making organisations decreased to 1.7%.In January-May 2011, an acceleration in the growth rate of capital investment utilisation was recorded – 131% (compared to 123.4% in January-April of the current year). The relatively low statistical base of the corresponding period of the previous year (100.6%) continues to exert influence; however, it is worth noting a significant increase in investments in May compared to April of the current year – by 38.1%. This investment utilisation dynamic is driven by high growth rates in a number of ministries and concerns: in the Ministry of Industry, the Ministry of Architecture and Construction, the Ministry of Energy, the Ministry of Transport, Belneftekhim, Bellesbumprom, and Belgospishcheprom. The structure of investments has slightly improved. The share of expenditures on the acquisition of machinery, equipment, and vehicles (economic modernisation), which had remained at its lowest levels in 10 years (38.1%) in recent months, increased to 40.8%. The attraction of foreign direct investment is proceeding at a slow pace this year. In the first five months of the current year, $743.1 million of net foreign direct investment was attracted into the country (excluding liabilities to the direct investor for goods (works, services)). Legal entities not subordinate to any department continue to show the greatest activity in attracting net foreign direct investment. In January-May 2011, a total of 1713.9 thousand sq.m. of housing was commissioned across the republic, which is 5.9% less than in the corresponding period of the previous year. The main reason for the lag (22.9% of the annual target) is the reduction in funding for preferential credit resources for the construction of apartment buildings in urban and rural settlements. The reporting period is characterised by the preservation of increased consumer demand. High growth rates are typical for both retail trade turnover (122.3%) and paid services to the population (111.1%). The formation of consumer goods resources in January-May 2011 was primarily driven by supplies from domestic producers. The share of domestic goods sold for food products, beverages, and tobacco products was 84.2%, and for non-food goods – 61.7%.It should be noted that while the trend of faster growth in sales of non-food products (126.6%) compared to food products, beverages, and tobacco products (118.3%) was maintained, the share of non-food products in retail trade turnover began to decline (from 51.8% in January-May 2010 to 48.7% in January-May 2011). Inventories in retail trade organisations as of June 1, 2011, amounted to 35 trading days and decreased by 8 trading days compared to the corresponding period in 2010, which is mainly due to the increased demand from the population in April-May of the current year. A certain slowdown in the growth rate of retail catering turnover is noted (from 114% in January to 108.3% in January-May 2011). This trend is primarily due to the high price index in catering establishments (in May 2011 compared to December 2010 - 133.4%), as well as the shift in consumer demand towards purchasing goods and paying for services. The situation in foreign trade in goods and services in January-April 2011 shows a trend towards stabilisation. The growth rates of imports and exports of goods began to converge: if at the beginning of the year import growth outpaced exports by almost 40 percentage points, then over four months the gap narrowed to 6.7 percentage points. In April, for the first time in Belarus's history, the monthly export volume exceeded $3.5 billion. However, the faster growth rate of imports (157.6%) compared to the growth of exports of goods and services (149.3%) resulted in a negative balance of foreign trade in goods and services amounting to $2.8 billion, or 15.6% of GDP. Compared to the four months of 2010, the foreign trade balance for goods worsened by $1.7 billion due to an increase of over $1 billion in the negative balance of oil trade, $438 million for gas, $381 million for other intermediate goods, and $586 million for passenger cars. At the same time, the positive balance in the trade of petroleum products in January-April 2011 increased by $990 million compared to the same period in 2010. The Consumer Price Index (CPI) for the five months of 2011 was 125.4% compared to December 2010, with approximately 77% of the CPI increase resulting from freely formed prices and tariffs, and about 23% from regulated ones.The growth of the consumer price index (CPI) is mainly due to the increase in food prices (125.9% compared to December 2010), which contributed 12.7 percentage points to the growth of the consolidated consumer price index. The increase in prices (tariffs) for non-food products and services respectively contributed 9.6 and 3.1 percentage points to the CPI growth. The price situation was significantly influenced by the situation in the foreign exchange market – the devaluation of the Belarusian ruble exchange rate, and as a consequence, the inflation-devaluation risks factored into the product prices, and the increase in the imported raw material component in production costs; external factors – the rise in global prices for raw materials and fuel and energy resources, agricultural products and food, and the existing gap in food prices with neighbouring countries; internal factors – the increase in regulated prices (tariffs) to reduce cross-subsidisation and budget subsidisation (housing and communal services, communications, transport). In January-April 2011, the positive trend of improving financial indicators continued. Thus, revenue from sales increased by 40.6% during the specified period, profit from sales – by 59%, net profit – by 68.3%, sales profitability increased from 6.1% to 6.9%, and the share of loss-making organisations decreased from 11.2% to 10.3%. At the same time, the growth rates of the main financial indicators for January-April of the current year were significantly higher than the growth rates of these indicators in January-April of the previous year. The development of the social sphere is characterised by the maintenance of a stable labour market situation, keeping unemployment within socially acceptable limits, a slight increase in the employment rate of the population, and high growth rates of real wages. As of June 1, 2011, the unemployment rate was 0.7% of the economically active population. The number of employed in the economy was 4653.9 thousand people, or 100.3% compared to the corresponding period in 2010. The nominal average monthly accrued wages in the republic in January-April 2011 increased by 40.5% compared to the corresponding period in 2010 and amounted to Br1488.3 thousand, and in the public sector of the economy – by 59.1% to Br1302.5 thousand. Real wages in January-April 2011 increased by 23.4% compared to the corresponding period in 2010.The trend of real wage growth rates exceeding labour productivity growth rates is being maintained. For January-April 2011, the labour productivity growth rate was 11.4 percentage points below the real wage growth. However, it is already possible to speak of a dynamic towards the convergence of these indicators. Thus, the results for January-May 2011 show, on the one hand, a progressive dynamic of economic growth in the republic and its individual sectors, and on the other hand, the existence of certain problems in the country's currency and consumer markets, which may affect the parameters of economic development in the near future. For the full functioning of the domestic currency market, the government, together with the National Bank, is taking measures aimed at organising the work of the real sector of the economy in the current conditions and conducting a balanced monetary and fiscal policy.-0-

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