Belarus: GDP growth moderates in Q3 amid fading base effect
According to a preliminary reading, GDP growth waned to 1.3% year-on-year in the third quarter, from 5.8% in the second quarter. The slowdown was partly driven by a less favorable base effect.
Taking a closer look at cumulative sectoral data, agricultural production fell at a sharper pace in January–September compared to H1. Moreover, both manufacturing, and wholesale and retail trade—the two largest subsectors—lost steam over the same period. However, the emerging information and communication subsector gained momentum in January–September compared to H1, having taken 13% of foreign direct investment over the first half of this year.
Looking at Q4, the new Astravets nuclear power plant opened last year will continue to boost electricity production. Meanwhile, exports so far seem unaffected by Western sanctions, having expanded in July and August after they took effect, suggesting their impact will be limited. On the health front, after a virtually non-existent domestic policy response to the pandemic, the country has been facing high daily cases which, even without any implementation of restrictions, may suppress retail sales somewhat.
Commenting on the performance of individual sectors, analysts at the EIU noted:
“The strong performance so far in the year has been driven by high growth in manufacturing and in services sectors. Agriculture is performing poorly, a trend that we expect to continue into our forecast period owing to a lack of investment and the greater impact of adverse weather conditions.”