In February 2021, the output of nine basic sectors of the Russian economy actually reached the level of March 2020, having decreased by 0.4% compared to January due to the manufacturing industry, construction and transport, according to the HSE. In March, industrial activity, according to leading indicators, did not grow. At the same time, the growth rate of output in the service sector accelerated sharply due to both internal and external demand, as analysts from Markit agency record.
In February, the output index of basic industries reached 99.3% of the level of March 2020, actually recovering from the crisis. In February, the level of March 2020 was exceeded in five out of nine basic economic activities. The backlog persisted, including in mining (primarily due to restrictions within OPEC+), construction, retail trade, transportation of goods by transport and in consumer industries (primarily related to the provision of services).
The slowdown in industrial recovery in February-March (according to leading indicators of Rosstat, Gaidar Institute, CMASF and PMI) made experts say that the economy, having completed recovery in the first quarter of 2021, returned to stagnation. Meanwhile, according to the Markit agency, the service sector recorded the highest growth in business activity in the last seven months in March – against the background of the fact that domestic demand was growing at the fastest pace since August 2020, and external demand was growing since October 2019. The revival of business activity in services in March was accompanied by an increase in employment in the sector and was so significant that it supported the growth of the composite Markit index against the background of a slowdown in the industry.
Indirect evidence of increased household demand in March is the continued rapid increase in consumer imports and increased consumer confidence. However, the consumer confidence index in the first quarter of 2021 compared to the second quarter of 2020, having increased by five percentage points, to minus 21%, only slightly exceeded the level of the third quarter of the previous year. At the same time, IHS Markit economist Shian Jones notes that service providers recorded a noticeable increase in costs at the end of the first quarter – such a surge has not been observed since the VAT hike in early 2019. "Business expectations in general remained optimistic, although confidence among both manufacturers and service providers dropped slightly. Optimism continued to come from hopes for a further economic recovery in 2021," experts at Markit conclude.
In 2020, Belarusian meat processors managed to increase the production of sausages and smoked meats due to the growth of domestic demand amid the coronavirus epidemic, as well as due to the favorable conjuncture of the Russian market.
2020 not only did not solve the problems of Belarus, but also added new ones. So, the expectations that next year it will be possible to get significant benefits due to lower energy prices, were not satisfied: the gas price remains at the level of 2020, and the oil price will even increase due to the tax maneuver in Russia. The question of the timing of the receipt of the second part of the Russian loan funds remains unresolved.
The US Congress approved the 2020 Bill of Belarusian Democracy, Human Rights and Sovereignty.
In January-September 2020, the GDP of Belarus amounted to BYN 106.6 billion, or in comparable prices 98.7% over the same period in 2019. In addition to the coronavirus epidemic and two currency crises, the main impact on the economic decline was made by the decrease in turnover in the petrochemistry and mechanical engineering.
Among other obvious factors, the protests in Belarus were the result of global changes in the economy. The old model, the tangible industrial one, is more and more moving aside, and it is being replaced by a new, information technology model generally known as postindustrial.