Belarus: Growth bounces back from over two-year low in Q3
According to a second release by Belarus’ Statistical Institute (Belstat), the economy expanded 1.4% year-on-year in the third quarter of 2019, up from Q2’s mild 0.5% increase, which had marked the softest expansion in over two years.
A more upbeat external sector drove the third-quarter acceleration. Exports of goods and services rose 3.6% on an annual basis, recovering strongly from the sharp 4.8% decline logged in Q2. Meanwhile, imports leaped 8.2% year-on-year, up markedly from Q2’s 2.3% increase.
Domestically, dynamics were less upbeat compared to Q2, though they remained healthy. Household consumption lost some pace, growing 4.0% in annual terms (Q2: +6.2% year-on-year). Similarly, fixed investment growth eased to 3.3% from 5.7% in the previous quarter, while government spending held relatively stable, up only a soft 0.4% year-on-year (Q2: +0.5% yoy).
The economy is seen picking up steam this year, thanks to an acceleration in government spending ahead of the election and a less downbeat external sector. Reduced wage gains will weigh on private consumption, however, while fixed investment will lose steam amid likely easing sentiment. Downside risks stem from bad loans in state-owned banks and regional rifts.