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GDP goes down due to non-stop production with no sales to follow
The foreign exchange market is stable and the gross domestic product has decreased compared to last year. Prime Minister Andrei Kabyakou expressed surprise at the situation during the meeting of the Council of Ministers:
"GDP is lower than last year by 3.7% in 9 months, and 3.9% - for 10 months. Industrial production for the last three months have remained at 92.9%. It means industry figures are not falling down, but not growing either," BELTA quoted the words of Andrei Kabyakou.
But the balance of trade in goods and services is the best in 15 years, said Prime Minister -- $ 1.2 billion in 9 months.
We tried to explain to the prime minister why the GDP was falling with the help of experts.
Belarusian products are not bought, the Russian market for us has decreased, said Vadzim Iosub, senior analyst at Alpari explaining the reasons for the fall.
"Oil prices fell, thus the prices for oil products also fell. The traditional for us Russian market narrowed down. Thanks to domestic demand, we abandoned the GDP acceleration. We no longer print money to raise salaries. After all, this growth leads to a destabilization of the economy and a collapse."
The possibility of further GDP fall depends on the Belarusian government. After all, without systemic reforms nothing will change, said Vadzim Iosub in his forecast.
Financial stability for the government is now more important than GDP growth, says economist Siarhei Chaly.
"It turned out that all the companies have to operate in conditions of budget constraints -- repay loans instead of living on subsidies. We have a large proportion of companies that could operate and do something only at risk for macroeconomics. And until their issue is solved, it will be like it is now."
According to the Prime Minister, there was no economic growth in January-September...
It turns out, the company do not earn by selling goods, people do not earn by working in enterprises, they do not buy products. Therefore, there is no GDP growth.
GDP - gross domestic product, the overall amount of all goods and services produced. It is the most common tool for assessing the country's economy. "Gross" means that it is used to measure production. "Domestic" means that the production is estimated in one country.