Belarus: Economy records quickest upturn since Q2 2018 in Q2
According to a preliminary reading, GDP growth improved to 5.5% year-on-year in the second quarter (H1 2021: 3.3% yoy), from 1.1% in the first quarter. Q2’s reading marked the strongest growth since Q2 2018.
Cumulative data for H1 shows a stronger manufacturing sub-sector compared to Q1, while the fall in construction activity ebbed. In addition, services sub-sectors such as wholesale and retail, transportation and information and communication all accelerated. Meanwhile, the agricultural sector remained in contractionary territory.
Going forward, several headwinds have emerged moving into Q3, as the most recent rate hike by the Central Bank could dent domestic activity due to tighter access to credit. Meanwhile, the external sector faces a double threat from the fresh sanctions imposed by the EU from late June and the deteriorating health situation in key trading partner Russia, which could lead to tighter restrictions that would pose a downside risks to external demand.