Belarus: Economy contracts for the first time in over three years in Q1 2020
The economy shrank 0.3% in the first quarter of the year, according to a preliminary GDP estimate released by Belarus’ Statistical Institute (Belstat) on 16 April. The Q1 2020 result contrasted the previous quarter’s 1.7% expansion and marked the first contraction since December 2016.
A downturn in industrial activity, amid falling output in the manufacturing, mining and energy sectors, led the quarterly contraction. Moreover, activity in the transportation and logistics, and retail trade sectors faltered in Q1, likely reflecting weakening consumer demand and collapsing global trade due to the coronavirus pandemic.
Looking forward, the economy is likely to tip into a marked recession this year due to the fast-spreading Covid-19 pandemic. Although Belarus has thus far taken an unorthodox approach by refusing to implement strict measures against the pandemic, the global fallout from Covid-19 is likely to begin to severely hamper both domestic activity and external demand in the second quarter. A worse-than-expected coronavirus outbreak and uncertainty over economic and political relations with Russia are key downside risks to the outlook.