Belarus’ business climate index declines significantly due to lower demand and output – NBB

<p> MINSK, Jun 1 - PrimePress. According to the National Bank of Belarus (NBB), Belarus’ Business Climate Index (BCI) has markedly decreased amid falling demand and output and a decrease in orders placed in the foreign and domestic markets, reads the NBB analytical review for February-April 2020. </p> <p>   </p> <p> The seasonal BCI decreased by 10.8 percentage points compared with the previous three months to minus 7.6% (the previous BCI showed a 0.5 pp quarterly decline to 3.3%). The actual BCI in February-April 2020 was at minus 5%, which is 3.6 pp higher than in November 2019–January 2020 </p> <p>   </p> <p> The economic situation in February-April 2020 also worsened considerably. 51.7% of enterprise managers called it unfavorable (40.3% three months earlier); 46.8% of respondents (58.6%) believed it was favorable. 68.9% (70.1%) said the economic situation at their enterprises was satisfactory; 23.3% (18.8%) said it was bad. </p> <p>   </p> <p> Demand for products and output decreases </p> <p>   </p> <p> According to enterprise managers, demand has declined significantly over the past three months. The ratio of answers was minus 20.6%, which is 5.3 percentage points below the previous reporting period. </p> <p>   </p> <p> All analyzed enterprises felt a decrease in demand. Transport companies top the list in this respect with minus 34.3% (minus 27% in the previous quarter survey). The National Bank says the season-based assessments of demand have been negative for several years now. </p> <p>   </p> <p> Enterprise managers say that actual output (contract works, transport services, trade turnover) decreased significantly in February-April 2020: the ratio of answers decreased by 5.2 percentage points compared with November 2019–January 2020 to minus 15.7%. 47.9% of respondents pointed at the insufficient receipts for financing current activities as a factor that impedes output growth; 47.6% cited consumer defaults in payment; 41.5% – floating assets shortages; 36.1% – poor demand. Industry-wise, the most significant decline in the volume of provided services was reported by transport enterprises. </p> <p>   </p> <p> Sales in physical terms decreased in February-April 2020 against the backdrop of contracting output and demand. The ratio of answers was minus 11.2% (minus 7.7% in the previous survey). Unsold inventories (facilities under construction behind schedule, commodities unsold over three months) generally decreased. The ratio of answers was minus 1.1%. </p> <p>   </p> <p> Half of enterprises need floating assets </p> <p>   </p> <p> Floating asset shortages were reported by 55.7% of monitored enterprises (54.8% in November 2019–January 2020). 58.8% of managers assessed the impact of lending terms on enterprises’ operations as moderate. 17.3% complained about changed costs of loans; 19.4% – changed credit accommodation terms. </p> <p>   </p> <p> 71.1% of respondents wanted the Belarusian ruble exchange rate to remain at the current level; 15.6% would like a higher rate; 13.3% spoke in favor of depreciation. </p> <p>   </p> <p> Pessimism prevails </p> <p>   </p> <p> Enterprise managers expect a further decrease in output and demand in February-April 2020, sale price hikes, layoffs and increased need for loans. </p> <p>   </p> <p> Also, 87.1% of respondents expect an increase in consumer prices in the next three months and a drop in the exchange rate of the Belarusian ruble against the Russian ruble and the US dollar. End </p>

2020-06-02

Primepress