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Half of German companies in Belarus do not plan investment expenditures

Every fourth German company in Belarus does not expect changes in market conditions, while only 1.9% expect market conditions to improve.

German companies in Belarus

The Representative Office of German Economy in the Republic of Belarus (AHK Belarus) in cooperation with the Information Center for German Economy, a subsidiary of the German Chamber of Industry and Commerce (DIHK), conducted a survey AHK World Business Outlook from March 21 to April 6, 2023.

The survey involved 53 German companies operating in the Republic of Belarus. In terms of industry sector these are 25 companies in the service sector, 18 companies from the trade sector and 10 industrial and construction companies.

The data from the spring survey are comparable with the results of the autumn survey of 2022: almost 6 out of 10 German companies operating in Belarus rated their current economic situation as “satisfactory”, about a quarter of the respondents – as “good” (compared with the autumn survey of 2022. Their number increased in 1.2 times), 17% of the respondents consider their economic situation as “bad” (in comparison with the autumn poll of 2022, this figure decreased in 1.5 times), as ThinkTanks.by.

Forecast for the near future from the surveyed companies: 2/3 of respondents anticipate maintaining their current economic situation at the same level (there were almost 1.6 times fewer such companies in the fall 2022 survey), about 1/3 of companies expect their economic situation to worsen (this figure decreased 1.8 times compared to the fall 2022 survey). 5.7% of respondents forecast an improvement in their economic situation, which is comparable to the results of last year’s fall survey.

According to the survey, the prognosis of the market situation in the near future remains negative: nearly 3/4 of the companies expect its deterioration, every fourth company does not expect any changes, and only 1.9% expect the market situation to improve (in the autumn 2022 the share of such companies was 4.3%).

In the nearest future about half of the companies participating in the poll do not plan any investment expenditures (in comparison with the autumn 2022 this index decreased nearly 1.3 times), every fourth company expects to maintain the volume of investments at the same level, almost 1/5 of the companies plan to reduce them. 13.2% of the respondents plan to increase investment expenditures (compared to the fall of 2022 there are two times more such companies).

The plans of companies with German capital for employment policy are as follows: Six out of 10 firms that participated in the survey expect to retain the number of personnel (such companies are almost 1.3 times more than in the fall 2022 survey). About 1/3 of the respondents plan to reduce the number of jobs at their companies (compared with the autumn survey this figure has decreased by 1.4 times).11.3% of respondents expect the possibility of increasing the staff.

Two-thirds of respondents consider supply chain disruption to be the most serious risk to their economic development, the same number of companies mentioned risks related to political and economic framework conditions (at the same time, the share of such companies has decreased by 1.2 times since autumn 2022).

About half of the respondents still noted a decline in demand.

Exchange rate fluctuations, legal guarantees and trade barriers remain significant risk factors (for 4 out of 10 companies). Compared to autumn 2022, the lack of qualified specialists is perceived as a more serious risk (an increase of 1.7 times). At the same time, there has been a decrease in the share of companies which see risks for their economic development in limitations on financing opportunities (from 28.3% to 15.1%), labor costs (down 2.6 times) and energy prices (only 1.9% of respondents named this factor, while in fall 2022 their share amounted to 17.4%).

About Yuri Drazdow (80 Articles)
Yuri Drazdow is the founder and owner of The Minsk Herald. He is also a journalist specialising in area of business and politics. He has degrees in Journalism and Software Engineering and has been working on media and IT projects in Minsk and London.
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