Belarus Economic Forecast

Belarus Economic Outlook

May 7, 2019

Growth slowed further in Q1 2019 due to spillover effects from a trade quarrel with Russia over oil import taxes, which dented government revenue. Belarus has historically relied on tax-free oil imports, exported at a profit, to generate a key source of state income. Budget strains, owing to the quarrel, forced a slash in consumer subsidies, triggering higher inflation and a contraction in wholesale trade, which likely translated into slower household spending in the quarter. In addition, industrial production teetered in Q1 as a result of the spat with Russia, which, coupled with falling agricultural output, weighed on exports and bruised economic activity. Meanwhile, Moody’s confirmed its B3 credit rating with a stable outlook; however, it also lowered its macroeconomic projections owing to the import tax row.

Belarus Economic Growth

Growth is set to moderate this year, restrained by a more challenging domestic backdrop. Household spending will likely slow, undermined by an acceleration in inflation amid higher prices for oil. Moreover, the government’s reluctance to slash spending ahead of the 2020 elections could weigh on the fiscal surplus going forward. FocusEconomics analysts expect growth of 2.4% in 2019, which is down 0.1 percentage points from last month’s forecast, and again 2.4% in 2020.

Belarus Economy Data

20132014201520162017
Population (million)9.59.59.59.59.5
GDP per capita (USD)7,8798,0295,9814,9155,741
GDP per capita (EUR)5,8835,8645,3704,4265,024
GDP (USD bn)74.676.056.746.754.3
GDP (EUR bn)55.755.550.942.047.5
Economic Growth (GDP, annual variation in %)1.01.7-3.8-2.52.4
Consumption (annual variation in %)10.94.3-2.4-3.92.9
Investment (annual variation in %)9.6-5.3-15.9-17.45.2
Industrial Production (annual variation in %)-4.92.0-6.6-0.46.1
Unemployment Rate0.50.51.00.80.8
Fiscal Balance (% of GDP)0.21.01.81.32.8
Public Debt (% of GDP)31.932.946.947.247.5
Money (annual variation of M2 in %)15.514.5-0.419.430.2
Inflation Rate (CPI, annual variation in %, eop)16.516.212.010.64.6
Inflation Rate (CPI, annual variation in %)18.318.113.511.86.0
Policy Interest Rate (%)23.5020.0025.0018.0011.00
Exchange Rate (vs USD)0.951.191.861.961.97
Exchange Rate (vs USD, aop)0.891.031.601.991.93
Current Account (% of GDP)-10.1-6.9-3.2-3.6-1.7
Current Account Balance (USD bn)-7.6-5.2-1.8-1.7-0.9
Trade Balance (USD billion)-4.6-2.6-2.1-2.5-2.9
Exports (USD billion)36.535.426.223.128.7
Imports (USD billion)41.138.128.325.631.6
Exports (annual variation in %)-19.8-3.1-26.1-11.724.0
Imports (annual variation in %)-8.6-7.5-25.6-9.523.3
International Reserves (USD)6.75.14.24.97.3
External Debt (% of GDP)53.152.667.580.473.6

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Belarus Facts

ValueChangeDate
Exchange Rate2.10-0.36 %May 13
Stock Market0.10.0 %May 13

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