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GDP was based on low base and state support in 2016

Analytics and Opinions
21:29 | 17.02.2017 | Business-News

At year-end 2016, Belarus' GDP 2.6% down as compared to 2015. The output of products declined in most branches of economy. Only agriculture (+3.4% as compared to 2015) and transport (+0.3%) were exceptions.

 

The mining industry also pretended to be the locomotive of the Belarusian economy in Q3. However, the output 0.7% down at year-end 2016 because of the difficult situation in the international potash market, late terms of the signing of contracts with the main consumers and potash fertilizer price drop.

 

Transport

 

The index in money terms slightly grew in the transport branch in spite of the decline in cargo and passenger traffic volume. According to the data of the National Statistical Committee, the cargo traffic in 2016 amounted to 430.4m tons, 3.7% down as compared to 2015. The total cargo turnover equaled to 125,263.2m ton-kilometers (-0.5%). The total cargo turnover fell mainly due to the lessening of supply of energy resources through pipes (the cargo turnover of pipeline transport fell by 2%, the cargo traffic of pipeline transport decreased by 4.9%).

 

Only air transport significantly increased its indicators. The cargo turnover rose by 46% and the cargo traffic grew by 41%. However, these impressive indicators did not have any effect on the statistics due to the relatively small air traffic.

 

The passenger traffic is in the same situation. The total passenger turnover in 2016 fell by 3.6% and amounted to 23,614.7m passenger kilometers, while the passenger traffic lowered by 6.3% and totaled 1,951.2 million people. Only air transport demonstrated the passenger traffic growth. The passenger turnover grew by 2.6% to 3,247.2 m passenger kilometers and the passenger traffic rose by 18.9% to 2.5 million people.

 

According to the official data, the transport in 2016 amounted to BYN 5.4 billion, or 5.7% of the GDP.

 

Over 11 months, receivables of the transport companies doubled and amounted to BYN 2.4 billion. Overdue receivables rose 8.5-fold over the same period.

Considering the fact that external receivables rose by just 2.6% over this period, it means that receivables rose at the expense of the domestic market. The carriers most probably rendered services and received no money, carrying debt over. Overdue debt grew over 11 months of 2016 by BYN 800 million (of BYN 1.2 billion of gain in receivables).

 

Agriculture

 

According to the data of the National Statistical Committee, agriculture accounted for BYN 6.45 billion, or 6.8% of the GDP in 2016. The growth was caused by the output increased mainly at the expense of the low base of 2015, grown prices for agricultural products and increased revenues of the Belarusian enterprises (the proceeds grew by 6.9% over 11 months, the net profit rose by 10%).

The output growth peaks in agriculture were observed in May and September-October. The May peak is partially explained by the low base of May 2015 and partially by the beginning of fodder conservation. In September-October 2016, the growth peak was caused by the shifts of harvesting due to the weather as well as the low base of 2015. This growth seasonality allows making the conclusion that the output gain in the branch was mainly provided by the plant production.

 

According to the data of the National Statistical Committee, the vegetable harvest grew by 12.2%, sugar beet harvest – by 29.7%, while the cereal harvest decreased by 13.8%, rape – by 32%. The procurement prices for cereals rose by 30%, for sugar beet – by 21.5% in 2016. The rape prices grew due to the bad harvest, while the vegetable prices slightly reduced (by 7%).

 

The cattle breeding provided a small output growth in agriculture, too. The output of the meat and dairy industry grew by 1.3%. However, the egg production reduced by 2.1%.

 

The meat and milk sales did not significantly grow in physical terms in the domestic market but the turnover of meat and meat products grew by more than 10%, and the turnover of milk and dairy products rose by more than 15% at the expense of the price rises.

 

Therefore, the agricultural output growth was provided by the price rises (mainly, procurement ones) in the domestic market. However, the growth in production indices would not be facilitated by the increase in qualitative indicators without the state support. Thus, the profitability of sales of the agricultural products by the end financial result (without the state support) as compared to 2015 decreased from minus 2.3% to minus 2.9%. The profitability of sales grew from 3.4% to 3.5% taking into account the state support.

 

Therefore, the locomotives of the Belarusian economy of 2016 managed to take run only with the help of the state that increased the branch turnovers, having created problems with receivables of the transport branch and having raised the prices for foodstuffs in the domestic market.

 

Considering the fact that the year of 2017 began with a range of conflicts regarding the foodstuff supply to Russia (primarily, meat and dairy products), the domestic market remains the only source of agricultural growth.

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