Belarus: GDP contraction eases significantly in Q3
December 30, 2020
A second estimate revealed the economy shrank 0.2% year-on-year in the third quarter of 2020, easing from the second quarter’s 3.3% decrease.
The uptick was led by an improvement in private consumption, which despite widespread protests, was only down by 1.7%, significantly easing from Q2’s 7.0% fall. Meanwhile, government consumption and fixed investment declined 0.9% (Q2 2020: -1.8% yoy) and 3.3% (Q2 2020: -5.6% yoy) respectively.
The decline in exports moderated from Q2’s fall of 8.3% to a mere 1.9% decrease in Q3, on the reopening of trading partners’ economies. Imports were down 6.8% in Q3 (Q2: -15.2% yoy), with the softer fall the result of improving domestic demand.
The economy should return to growth this year as domestic and external demand normalizes. Moreover, a mass inoculation campaign began on 29 December using the Russian vaccine Sputnik V, boding well for activity. However, political instability, sanctions and the country’s fragile external debt position pose downside risks to this year’s outlook.
Author: Frederico Teixeira de Abreu, Junior Economist