Russian Economy Will Drag Down Belarusian Economy
- 5.08.2024, 8:10
New risks appear in the Russian market for Belarusian exports.
Having raised the key rate, the Russian Central Bank announced a tightening of monetary policy and gave a disappointing forecast for the Russian economy. But this did not affect the optimistic expectations of the Belarusian government.
How the tightening of the Central Bank's policy will affect the Belarusian economy, and how we will pay for the optimism of our officials — in the new release of the Optimum show on the Belarusians and the Market YouTube channel.
Since the beginning of the year, the flagships of the Belarusian industry – the Tractor Plant, Gomselmash, Atlant - have been losing their positions in the Russian market. For example, sales of MAZ trucks in the first half of the year fell by 16%. Sales of passenger buses, which literally burn at work, fell by almost 50%.
This year Belarus expected to increase exports to Russia by 7%. But at the end of the first quarter, exports to Russia did not grow, but decreased. But imports of Russian goods to Belarus jumped sharply. As a result, the trade turnover grew by 4.2%, but not in favor of Belarus.
And now new risks appear on the Russian market for Belarusian exports. The Russian Central Bank said that the economy has overheated and began to tighten monetary policy, raising the key rate to 18%. The Belarusian economy actually has the same problems. Only now the tightening of Russian financial policy is added to them.
The rate hike by the Russian Central Bank may slow down not only the Russian economy. This increase may further harm Belarusian exports to Russia.
The rate hike means that loans in Russia will become more expensive. And the rise in the cost of loans leads to a slowdown in economic growth and a decrease in consumer demand. The lower the growth rate and consumer demand, the lower the import demand. Belarusian exports to Russia were already declining, and now it will also be affected by the slowdown in the Russian economy.
Given that Russia accounts for two-thirds of Belarusian exports, any drop of a couple of percent is fraught with losses of hundreds of millions of dollars.
The problems of Belarus and Russia are the same, but their solutions are different. The Belarusian authorities are spurring economic growth with cheap loans and budget subsidies.
Because the next year, the Belarusian government again set its sights on the record. It expects the economy to grow by at least 4.1%.
But everything that was planned will have to be sold somewhere later. And with this, given the situation in the key market, there is a problem.
And also the problem with who will pay for the optimism of our officials. For the supply of Belarusian goods on credit. For barter schemes with far-arc countries. For the victory over prices and common sense. So far, Belarusian enterprises mainly pay for all this.
According to Belstat, the amount of losses of Belarusian companies for six months increased by one and a half times. Losses in the industry in general have doubled.
These losses have to be covered either by bank loans or by budget subsidies. Because banks, apparently, do not always cope either.
Recently, the National Bank reported that for the first half of the year the state budget was in deficit, and this deficit amounted to more than a billion rubles. The Belarusian authorities have decided that economic growth is more important for them than financial stability. But in the end, it may turn out that there will be neither stability nor growth.