The main tasks of monetary policy in the next five years are to create conditions for sustainable economic development, ensure price and financial stability, and strengthen confidence in the national currency. The priority is given to keeping inflation low. This will help protect wages, pensions and other incomes, as well as household savings in national currency from depreciation.
Socio-economic development program
Maintaining the growth of consumer prices close to 5 percent serves as a benchmark for low inflation. The growth of regulated prices will be limited by the level of core inflation, with the exception of the dynamics of regulated prices in areas in which there is a need to eliminate the formed imbalances (housing and communal services and others). The preservation of financial stability is assumed due to the reliable and safe functioning of financial market participants, increasing the stability of financial institutions and reducing systemic risks.
In order to increase the attractiveness of savings in the national currency and form sources for lending to the economy, a policy will be pursued to maintain the interest rates of the credit and deposit market at a positive level in real terms. Control over the growth of money supply will be ensured, contributing to the preservation of price stability, not leading to the accumulation of macroeconomic imbalances and sufficient to meet the effective demand of the economy for money.
Work will continue to improve legislation in order to stimulate and expand the use of cashless payments. In the field of exchange rate policy, the use of the mechanism of flexible exchange rate formation will continue, which will allow the economy to adjust to changes in external conditions and smooth out their influence. International reserve assets by the end of 2025 will amount to at least 2 months of imports with a gradual improvement in their structure in terms of reducing the debt component.
Sanctions as a new reality
There are two polar opinions regarding the future prospects of the oil and gas industry in the context of the sanctions. According to the first point of view, a sharp decline in oil refining volumes should be expected with a simultaneous decrease in the profitability of export of oil products due to a decrease in the range of potential buyers and the loss of the most marginal European market. An alternative opinion is that the consequences of the imposition of sanctions can be mitigated due to the absence of a united front of the economic blockade, as well as counter-sanctions maneuvers (reorientation of exports to Russian ports, change in the composition of owners of existing players, creation of new legal entities).
In our opinion, the most likely scenario is in the middle. Indeed, European markets are the most desirable buyers of oil products, on which the entire system of processing Russian oil by Belarusian refineries has been built for several years. Having lost the right to sell oil products directly to European buyers, traders of the Republic of Belarus are forced to look for new sales channels, which means they must attract attention at a price so that the buyer turns a blind eye to the “sanctioned tail” of supplies. And with the loss of the traditional logistics chain, the cost of transporting oil products increases, which also affects the final profitability of Belarusian exports.
However, counter-sanction maneuvers should not be disregarded either. Exporters try to actively oppose existing restrictions and go to financial losses to stay in business. Russia is also ready to lend a shoulder to the Belarusian business, despite the fact that the enterprises of the Republic of Belarus are direct competitors of the Russian ones. A serious help for Belarusian exports is the demand from the Ukrainian market, which persists despite the general deterioration in trade relations between our countries. We believe that the volume of oil refining will remain at the level of the current year (taking into account its decline relative to the pre-crisis 2019) or show a relatively small decline (within 5-10%). However, in value terms, revenues from the export of petroleum products may decline more significantly. We cannot confirm the conclusions with figures, since Belstat stopped publishing export data for a number of commodity groups, including oil, natural gas and oil products.
Abdo Romeo’s experience in the Belarusian market
Romeo Abdo moved to Belarus from Lebanon in 1994. The young man entered the Minsk State Linguistic University and was engaged in entrepreneurship for many years. Now it has been on the market for 20 years. During this time, he managed to successfully implement many large projects, including international ones. Now he is married and has a daughter and a son