Social and Economic Situation

Socio-economic development of the Republic of Belarus in January-August 2006 is characterized by the following indicators.

As a result of dynamic and sustainable operation of key branches of economy the GDP growth with respect to the methodology of index of physical volume of production calculation amounted to 109,8% against the same period year 2006.

The share of industry added value in the GDP made 29.2%, of agriculture – 6.1%, of construction – 7.2%, of transport and communication – 9.2%, of trade and public catering-10.4%.

In January-July 2006 the GDP energy intensity dropped by 1.6% in comparison to the same period 2005.

Index of physical volume in production in January-August was 12.7% up as the previous period 2005. Consumer goods production increased by 10.6%, including food - by 12.6%, non-food goods - 9%.

In January-August 2006 increased production output by 419 out of the 697 most important types of production as compared with the same period 2005.

State-owned industrial enterprises (both republican and municipal) making 38.2% of the total number of enterprises manufactured 35.9% of the national output, and private enterprises with state share in authorized fund – 53.1%.

The share of new production in January-August 2006 in the industrial output accounted for 13.5%. At the same time according to the Ministry of Industry this index exceeded thirty percent (32.7%).

Cutting of materials output ratio in the industrial sector in January-July 2006 made up 1.1% in comparable prices.

In January-August 2006 the total agricultural output in all sectors of economy increased 2% up on the same period last year.

The agricultural enterprises and farm entities output totaled 103% in comparison to the same period 2005. Animal production grew by 12.2%, but plant production reduced by 9.6%.

Shortfall of crop output in great measure was caused by torrential rains at the harvesting high season. At the end of August remained unharvested about 15% of cereal and grain leguminous plants sown areas, while in 2005 the grain harvest campaign was mainly finished by the 1st of September.

According to estimates, households reduced their agricultural output by 0.4%.

Agricultural and other enterprises considered increased the sales of meat and poultry by 13%, milk - by 9%, egg - by 15% against the same period last year.

Measures aimed at investment activity development, business-planning of investment projects resulted in capital investment growth by 35.3% in January-August 2006 against the same period last year.

The expenditures on machines, equipment, transport vehicles purchases made 148.3% in January-August, 2005. These expenditures accounted for 46.7% of the total investment (in January-August last year – 44.1%).

Capital investment in production rose by 39.8% against January-August 2005. Investments for production purposes accounted for 64.8% of the total investments (up to 0.4% against the same period last year).

In January-August 2006 the housing investment accounted for 18.5% of the total investment or 122.7% against the same period last year.

January-August saw the construction of 2441 thousand sq m of housing financed from all sources including 1060 thousand sq. m in villages and towns.

The construction ramped up by 350 thousand sq m, or by 16.7% against January-August 2005.

835 thousand sq m of housing were built in rural regions and amounted to 34.2% of the total area (January-August 2005 – 33.4%).

The construction of housing is realized by means of proprietary funds and credits in proportion to 54.7%-37.2% of the total construction.

The foreign economic activity in January-July 2006 displayed positive results. Thus, foreign trade in goods and services calculated on the basis of the balance of payment methodology accounted for 131.9% against January-July 2005, including export - 124.7%, import - 139.7%.

In January-July 2006 trade deficit made US $415,4 mln while foreign trade in goods resulted in deficit of US $840,5 mln, foreign trade in services-in surplus of US $425,1 mln.

Belarusian economic entities performed export-import operations with 167 countries. Goods were supplied to 134 states and were imported from 146 countries.

The main foreign partners of the Republic of Belarus in January-July in 2006 were: Russia – 47.6% of the total turnover, the Netherlands – 10.4%, Germany - 5.6%, the Ukraine-5.2%, the United Kingdom – 4.3%, Poland – 4.2%, China and the United States - 1.6% (each), Italy and Lithuania - 1.5% (each).

Sustainable economic growth in January-August 2006 stimulated further outrunning growth of real cash incomes.

Real cash incomes of the population (incomes adjusted to the Consumer Price Index) grew in January-July 2006 by 17.6% against the same period last year.

Cash incomes of the population are formed by means of wages and social transfers accounted for 82.9% of the total cash incomes of the population.

In January-July of the current year nominal wages grew by 28.4% in comparison with the same period last year and made 565,7 thousand BYR, in July - 612,3 thousand BYR (285,5 USD). The wages of budget sphere workers grew by 26.8% and accounted for 525,8 thousand BYR, in July-558,1 thousand BYR (260,3 USD).

In January-July 2006 real wages (wages adjusted to the growth of consumer prices for goods and services) amounted to 119.7% against January-July 2005 and increased in July by 0.9% against July 2005.

Spending capacity of wages shows tendency to increase. Thus, in January-July 2005 balance with minimum consumer budget amounted to 197.2%, in January-July 2006-223.5%.

As of the 1st of September, 2006 recorded unemployment rate made 1.4% of economically active population.

Household income growth as well as disinflation stimulated consumption in January-August 2006.By means of all sales channels retail trade turnover including Public catering amounted to 17,2% against the same period 2005.

In January-August 2006 in the total retail trade turnover in form of private property was 81.5%, state-owned – 15.6%, foreign – 2.9% (in January-August 2005 - in proportion to 81.7%, 16%, 2.3%).

In January-August 2006 the share of domestic products sold in shops amounted to 80.2% including foodstuffs – 86.3%, non-food products – 71.2%.

In January-July 2006 paid services rendered to the people through all sales channels accounted for 111.4% in comparable prices against the same period last year.

In January-August 2006 consumer price index markup describing inflation made 2.9% or 0.4% per month on average.

Financial results of the republic’s real sector of economy in January-July 2006 are characterized by the following indices.

The profitability of goods, works and services sold in January-July 2006 made 13.9% (in January-July 2005 – 14.5%), sales profitability made 8.3% (in January-July - 88%).

The profitability of goods, works and services sold by the industrial enterprises in January-July 2006 accounted for 15.7% against 16.6% during the same period 2005, sales profitability made 11.3% against 12%.

In January-July 2006 there were 74.6% of profitable enterprises.

The number of loss-making enterprises in January-July 2006 dropped to 25.2% in comparison to the same period last year and the share of loss-making enterprises amounted to 16% against 21.4% of the same period last year. The number of loss-making industrial enterprises in January-July 2006 made 25.9% against 29.4% in January-July 2005.

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Ministry of Foreign Affairs of the Republic of Belarus