Page 7 - BELRptNov18

increase in consumer prices totalled 5.6%. In January-September, the central bank's monetary management policy was aimed at supporting macroeconomic balance and slowing down inflation.
Belarus' industrial output increased by 7.8% year-on-year in January-June, according to the national statistics agency Belstat, the last data available. The result was mainly attributed to a growth in the nation's processing industry (a 10.2% y/y jump) and mining industry (a 3.7% y/y growth), while production of electricity, natural gas, steam, hot water, and conditioned air went up by 5.8% y/y in the first half of 2018.
Wages continue to rise slowly and are creating a middle class – as evidence by the announcement by Eurotorg (aka Euroopt ), the republic’s largest commercial supermarket chain, that it will hold the country’s first ever private sector IPO in London soon.
President Alexansder Lukashenko has been pushing to increase the average salary to BYN1000 ($461) per month from around BYN800 now, but incomes have been rising steadily and Belarus’s current average income is on a par with Russia’s and ahead of that in Ukraine.
Having a little spare money to spend is key and real disposable income (the money left after food and utility payments) in Belarus increased by 7.4% y/y in January-April, according to news agency BELTA. Real disposable cash earnings are expected to grow by 3.4% y/y in 2019, according to Eurotorg.
The budget is almost in balance. Fitch's measure of general government balance (consolidated government including Social Protection Fund and off balance sheet expenditure related to guarantees and financial sector transfers) is estimated to have recorded a near-balanced position at -0.1% of GDP in 2017. This estimate incorporates a consolidated government surplus of 2.4% of GDP reflecting a combination of revenue growth derived from higher oil prices and a more dynamic economy and continued expenditure restraint.
Trade remains one of Belarus’ strongest suits and the surplus of the foreign trade in merchandise and services amounted to $580.3mn .
Belarus' trade in merchandise and services totalled $54.2bn, 19.1% up from January-August 2017. Export amounted to $27.4bn, with import going over $26.8bn (19.9% up).
The financial sector remains a contingency liability to the government and a potential risk for macroeconomic stability, despite some improvements. Regulatory NPLs (the three riskiest categories) have stabilised, reaching 12.8% of gross credit exposure in 3Q17 due to the improved macroeconomic backdrop leading to lower interest rates and lower exchange rate volatility.
Capitalisation levels have improved somewhat, but remain modest given high credit risks. The large presence of the public sector (65% of assets) creates fiscal risks for the sovereign due to the potential need of further capital injections, execution of guarantees and issuance of securities in exchange of loan transfers.
7 BELARUS Country Report November 2018 www.intellinews.com