Lukashenka's Economy Takes The Last Position Even Among Countries Of The EEU

Belarus has the lowest growth rate among the EEU countries.

Despite a slight slowdown in the fall in the first six months of 2016, Belarus shows the lowest growth rate among the countries of the EEU, according to a review of the Eurasian Development Bank, BelaPAN reports.

Meanwhile, a macroeconomic research of the EDB says that in August 2016, according to preliminary assessment of the Belstat, some acceleration of economic decline is observed. In January-August Belarus' GDP declined by 3% compared to the same period in 2016. "Reduction in the issue continued amid weak domestic and external demand on the background of the conservative monetary and fiscal policy", the macroeconomic research says.

EDB's economists have identified the main factors of economic activity reduction in Belarus. Thus, in May-August the real disposable income continued to decline and in January-August equaled to 93% from the same period of 2015. At the same time against the backdrop of the fall of real disposable income there is a slight acceleration in the decline in the final consumption expenditure of households in the II quarter (drop by 2.1% compared to II quarter 2015) and slower contraction in fixed capital accumulation (drop by 11.2%compared to II quarter 2015).

It is also said that a positive growth dynamics observed in II quarter 2016 turned to be negative again in the beginning of III quarter. Mostly it related to reduction in volume of oil processing conditioned by reduction in imports of crude oil from Russia. In January-August 2016 the drop in industrial production declined by 1.8% against the corresponding period of the previous year (a drop by 2.5% in January-April 2016).

The positive dynamics in agriculture observed in January-July 2016 was replaced with a sharp drop by 15.5% against August 2015, due to both high base of the previous year (a later corn harvest in 2015), and reduction of the harvest as a whole compared to 2015. The fall in agriculture in January-August 2016 amounted to 2.2% against the same period in 2015, after positive growth by 4.2% in January-July 2016.

The negative dynamics continues in the construction and trade field, in January-August 2016 it fell by -16.9% and -6.1% against the same period last year.

EDB's economists have concluded that when existing internal factors hindering the restoration of economic growth, the reduction of crude oil supplies from Russia to Belarus at the beginning of III quarter has deteriorated the GDP forecast for 2016 to minus 2.6% (previous forecast - drop by 1.9%).

A gradual recovery by 0.6% and 0.9% is expected in 2017-2018 respectively. At the same time, as noted by economists, a way out of a recession will complicated in case of deterioration of the external environment or the risk implementation of financial instability on the background growth of toxic assets of the banking system.