OREANDA-NEWS. Shrinking exports along with the heavy burden of external liabilities, which reached its peak this year, have come to affect the process of preparing an economic growth forecast for 2013.

Viktor Pinigin, First Deputy Director of Belarus' Economic Studies Institute, made a statement to this effect on Friday while explaining the basics of forecast preparation to a group of parliamentarians.

The expert enumerated the problems that aggravate Belarus' economic situation. He mentioned a decline in exports (potash, petroleum products, machinery). Both exports and imports are on the decline, however, exports have been reducing to a greater effect, the expert said. This indicates that Belarusian-made commodities are being substituted with imports. Moreover, it testifies to the fact that Belarusian industries are heavily dependent on imported materials and complete parts, Pinigin said.

Another problem that undermines Belarus' economy is the disparity between wage growth and labour productivity: Belarus' labour productivity grew 1.1% in January-August to compare with a 20% rise in household incomes.

The situation is aggravated by the fact that domestic consumption is on the rise, while the GDP grows at the expense of domestic consumption and shrinking exports, which adds to the foreign trade deficit. That money keeps pressing on the commodity market (purchase of imported commodities) and the FX market (the government's gold and FX reserves flow into the pockets of households). Pinigin believes this will be one of the greatest challenges in 2014.

The expert also mentioned that the fact that the heavy burden of external liabilities will aggravate the current account deficit in 2013-2014.

At the same time, Belarus witnesses the exodus of underpaid highly skilled professionals, who leave for foreign states.

Belarus keeps stimulating GDP growth by means of bolstering local consumption, which is fuelled by imports to the tune of 35%, Pinigin informed. A USD 1 billion rise in domestic consumption accounts for a USD 350 million rise in imports. Belarus' export growth is fuelled by imports to the tune of 50%.

All these factors must be taken into account, while making an economic development forecast for 2014, Pinigin concluded.