from 17.05.2016

Andrei Kobyakov have held a meeting of the Council of Ministers

The meeting of the Council of Ministers of the Republic of Belarus under the chairmanship of Prime Minister Andrei Kobyakov held on may 17.

Considered the results of socio-economic development of the country for the first quarter of 2016.

"The figures are known. According to operational data of the national statistics Committee in four months GDP have 97 percent - said Andrei Kobyakov, opening the meeting. In April we increased by 0.6 percentage points. Overall, we have observed a number of rather consistent: January – 95,7% January-February – 96%, the first quarter is 96.4%, four months – 97%. In principle, there is a dynamics of the return trajectory of economic growth."

The Prime Minister noted that the Government and the national Bank consistently implement measures of the macroeconomic balance in foreign trade conditions substantially different from those on which was formed a forecast for 2016.

"Let me remind you, the price of oil was projected at $ 50 per barrel in the first quarter it amounted to $ 32 / bbl. It was assumed that the Russian ruble will be around 63 rubles per dollar in the first quarter it amounted to 74.6 rubles per dollar. It was planned that the rate of economic growth in Russia, our main economic partner, will be at 100 percent, in fact – 98,8%. We assumed that the average annual exchange rate of the Belarusian ruble to the US dollar will be at 18 689. As you know, in the first quarter, the average value of the Belarusian ruble amounted to 755 20 rubles per dollar", - reminded the Prime Minister.

According to him, measures of macroeconomic balancing could not affect the pace of development of the economy, particularly its real sector. "GDP for the first quarter, we do not get 2.5 percentage points to the quarterly forecast, - said Andrei Kobyakov. - I will remind, the forecast for the first quarter was 98.9 percent. However, the industry, although lower than 2015, but higher than predicted. In the first quarter to 95.7 when you have a forecast of 95 percent. Over four months already 97.5 percent".

Two-thirds of the gap with the forecast in the first quarter formed by reducing the gross value added of the construction section, noted Andrei Kobyakov. Another third is associated with the slowdown of cargo transportation and wholesale trade. - Plus work only agriculture - 102% for the first quarter.

"Volatility in the oil and potash markets has led to significant price losses in our export markets and the drop in the value of exports by 16.7 percent, - continued the Head of Government. - If you drop potassium and the oil industry, with a total subsidence of prices physical volume of exports rose by 4 percent."

The budget received less income. In the first quarter, revenues from customs duties on petroleum products amounted to only 140 million U.S. dollars, or 12.7% of the annual plan.

At the same time, with all the complexity of the situation, provided financial and exchange rate stability. Maintained a flexible exchange rate.

In the first quarter fluctuation rate reached 22 thousand to the dollar, while the planned annual average value of 18.7 thousand rubles per dollar. "This, in turn, could not fail to affect the financial condition of enterprises, many of which have loans in foreign currency. However, at the exchange rate of the Russian ruble reached the level of average annual forecast values and the forecast we have 297 Belarusian rubles per Russian ruble, which supports the competitiveness of domestic goods by our main trading market," said Andrei Kobyakov.

"Market fluctuations in the exchange rate did not cause an excessive demand for currency and not escalated the situation on the currency market, - said the Prime Minister. – For four months of net sales of foreign currency by the population amounted to 347 million U.S. dollars, including in April – 199 million USD".

The needs of economic entities in foreign currency is satisfied in full, and since February, they have also become net sellers of foreign currency. In April on a net basis by legal entities sold 116 million U.S. dollars.

"It was kept the balance of foreign trade. For January-March 2016 balance of trade in goods and services within the forecast: minus 0.1 percent of GDP, while the forecast is no worse than the minus 0.9 per cent, noted Andrei Kobyakov. - In a timely manner and without prejudice to international reserves paid in foreign currency debt".

"In four months we have an increase of inflation plus 6.4 per cent - he stated.- Last but not least the question of "revival" of inflation is that a number of state enterprises, which, by the way, is government support, due to the growth of prices, trying to improve their economy, not reducing costs, but on the background of some increased demand began to increase their wages, which is strictly not correct".

If wage growth is based on real market results – no questions, he said. "But when they suddenly decided to raise salaries, while sitting on the tip of the state financing, while established strict standards for salary in the budget sphere and pensions and benefits are rising very moderately, this is unacceptable. Appropriate orders to prevent such practices is given," he said.

In the light of changing conditions of economy, the Ministry of Finance and the national Bank made the forecast. Refined calculations are made at an average price of oil in 2016 to $ 35 per barrel and an average annual exchange rate of the Russian ruble – 75 rubles per dollar: i.e. the version of the script 35/75. "In this scenario, the annual gap funding budget amount is estimated at 27 trillion. rubles. It's better than 30/90 scenario, which we outlined at the beginning of the year, when the gap was 38 trillion. rubles," - said Andrei Kobyakov. According to him, adopted pursuant to the Decree No. 78 measures of fiscal consolidation – to reduce spending of 15.4 trillion.rubles and attracting additional budget revenues amounting to 5 trillion. rubles - reduce the gap in terms of script 35/75 to the level of 6.6 trillion. rubles.

"The situation today is slightly better than estimated, - stated Andrei Kobyakov. - Someone, maybe, thinks that due to this, the measures taken will be enough to balance the budget. With the improvement of quotations of oil from individual Ministers, chairmen of regional Executive committees come up with ideas to recover the costs reserved on consolidation of the budget. All answer at once – yet the measures taken are clearly insufficient".

The head of Government stressed that first and foremost on the agenda should be issues of cost reduction, increase of efficiency of functioning of enterprises and industries. "Challenges remain, by themselves they will not be solved," he said. - We must continue to seek additional fiscal consolidation. The Ministry of Finance in conjunction with the MNS and the Ministry of economy was entrusted to discuss the issue with the concerned and submit it to the Government for discussion at the Council for the development of operational measures of economic development with the participation of senior officials".

Andrei Kobyakov reminded that optimized for current opportunities directed lending - to 44 trillion. rubles to 28 trillion. rubles. "We have seriously revised capital expenditure budget has tightened requirements for banks evaluating investment projects. All this could not affect the numbers, he stated. As a consequence, the expected sunk, the volume of construction works - 77.1% in 4 months, and investments in fixed capital - 76 percent", - he informed.

Achieve the targets for economic growth due to the unwinding of the domestic demand under the current economic conditions pose a significant macroeconomic risk, said the Head of Government. According to him, to compensate for falling volumes in construction can and should be, above all, ensuring timely commissioning of facilities where there is a sufficient funding, as well as through the active involvement of external resources in projects in the real sector of the economy.

It is the development of the Russian loan for NPP construction, world Bank loan for reconstruction of the road "Minsk – Grodno", the Chinese credit lines for projects on completion of reconstruction of the road Minsk – Gomel", the creation of the industrial Park "Great stone", a plant "Belgee", the construction of a plant producing sulfate bleached pulp in Svetlogorsk SKK, retooling the Dobrush paper mill, the modernization of the energy system, the establishment of a national system of satellite communication and broadcasting etc.

"Worried about the situation, when every corner builders are trumpeting the low load, the lack of work, but at key sites, secure funding, not enough builders, said Andrei Kobyakov. - Me have given instructions to the Minister of architecture and construction to take each construction site, securing external funding, for manual control. Please details to report on the status of this order, where the funds are not being developed, for what reasons, how to deal with the provision of builders".

The General decrease in volumes of industrial production in all sectors for 4 months was 2.5 percent. "There is a noticeable trend to recovery in production volumes, - said the Prime Minister. - Monthly grow by 1.2 – 1.8 percentage points. This is due not only to low base effect, but also to the fact that this sector is really animated".

More than last year Belarus produced sweepers (6.8 percent), wallpapers (by 14.4%), glass (by 11.1 percent), textiles (6.2 percent), hosiery (18.4 percent), milk and dairy products (9.8 percent), televisions (3.2 times), the third increase in the production of chipboard, reached the level of last year on tractors (100.4 per cent).

"A key requirement for the production – two-thirds of all volume has to go for export - recalled Andrei Kobyakov. - This means that on the major goods-representatives are required to sell for export not less than 28 thousand tractors, almost 7 thousand freight cars, almost 2 million tons of finished rolled ferrous metals, 1.5 million tons of cement, 125 thousand tons of cheese and so forth." The Ministry of economy elaborated the each product item.

The government established the monitoring group on the development of new markets: Mexico, Costa Rica, Panama, Chile, Morocco, Tanzania, Zambia etc. "the Ministry of foreign Affairs in charge of organizing their work effectively", - set the task Andrei Kobyakov.

According to him, there are concerns about falling exports to China, primarily at the expense of potash fertilizers. "But even without them, the exports to this will have fallen by 22 percent, he stated. - You must rebuild activities in Vietnam market, exports to this country decreased almost 4 times, to exploit new opportunities from the creation of a free trade zone and quickly implement the Agreement on industrial Assembly with a view to the whole region of South-East Asia".

For many countries of the assigned officials responsible for export."While work on the promotion of our products is not comprehensive. Tasks are not performed in most countries.More needs to be productive and outreach activities," - said the Prime Minister.

He reminded that the main priorities are the growth of exports, cost reduction, creation of new jobs and the timely development of investment-backed financing".

Andrei Kobyakov asked speakers at the meeting separately to focus on these priorities and to report on how they will be provided in the first half of the year and at year-end. "We cannot afford a slowdown in agriculture. In the second quarter should concentrate on milk production: has all the possibilities to increase the volume to 103.6 percent; feed - needs to prepare at least 7.4 million tons of haylage, which will give an increase of 7.2 percent. Plus efficiency of animal husbandry" he said.

The head of Government also focused on the issues of creation of new jobs. "The national statistics Committee reports on the execution of the quarterly index. Plan – 7320, fact - 8832. If so, it is possible to move more boldly in matters of a more efficient allocation of labor resources, from the companies where there is an excess number of newly created jobs. But we will discuss that separately", - said the Prime Minister.

"No time to lose. For the first half of each will be held accountable for the entrusted site of work, - concluded Andrei Kobyakov. - Decided that in the next month during meetings of the panel on key issues of development will hear all the Ministers and governors. I ask all to prepare seriously".

As noted in its report, the Minister of economy Vladimir Zinovsky, taking into account the prevailing economic conditions in the country adopted a series of stimulus measures for the real sector of the economy. Allowed to transfer exchange differences 2016 for future periods. Granted the right not to charge depreciation. Key energy intensive enterprises saved the energy tariffs on the level of 2015. For some businesses, their level is additionally lowered. Monetary policy supports export. It gives results. "After the low export volumes in the first two months, in March exports of goods and services increased by 14 percent. Recovering external demand for our investment products. Exports for the first quarter increased by 2.2 percent compared to the first quarter of 2015", - stated the Minister.

According to him, prudent macroeconomic policies allowed to start consecutive rate cut. "This decision of the Board of the National Bank in a timely and reasonable", - he said.

Vladimir Zinovsky recalled that in practice have moved the issues of implementation of program-target method. Approved 19 of the 20 state programs in conjunction with the draft five-year plan.

On behalf of the Government, the Ministry of economy drew up a list of 120 major investment projects implemented in 2016. Their total funding - 55.8 trillion.rubles. Every object is assigned a responsible officer. Control over the execution of construction works at these facilities should be carried out weekly by the working group of the Ministry of architecture.

Also prepared a list of investment projects for attracting foreign direct investment with a volume of 754 million U.S. dollars.

"Every organization needs to ensure complete and timely sampling of loans under the regulation "On crediting of state programs and activities in 2016 – said the Minister. - For each investment project to ministries and Executive committees to determine the proposed officer, personally responsible for its timely completion.

According to him, the important task – to involve in economic circulation available funds of the population. "On the one hand, a number of administrative decisions to limit the attractiveness of consumer imports, the Decree No. 7 of irrevocable deposits, Decree No. 40 on the packages. On the other hand, better tools are needed to link the" money people," he said. For this, many countries, faced with similar problems, included tools such as a sharp depreciation of the cost and simplification of access to land around the major cities; concentration of limited resources on the state support of network infrastructure; stimulation of individual housing construction.

"These areas can give growth on the horizon one and a half years since the beginning of their implementation. We provide them in the draft Programme of the five-year plan", he continued.

According to Vladimir Zinovsky, the industry in the first quarter of work at the level of the quarterly forecast is 95.7 percent. However, the gross added value below 100 percent. In the first six months, you need to enter the growth rate of 100.2 per cent, increasing this figure by year-end even higher. The preconditions for this, said the Minister. In January-April the industry recovery accelerated: plus 1.8 percentage points in comparison with January-March, or 97.5 percent of the corresponding period last year.

Vladimir Zinovsky said that the key condition the production policy of the current year – delivery of all additional volumes produced for export.


Council of Ministers of the Republic of Belarus