Belarus: Growth falls to three-year low in 2019
A second GDP estimate released by Belarus’ Statistical Institute (Belstat) confirmed that growth picked up mildly in the fourth quarter of last year (Q4: +1.6% year-on-year; Q3: +1.4% yoy). That said, full-year growth fell to a three-year low (2019: +1.2% yoy; 2018: +3.1% yoy), as a subdued external environment battered the economy over the course of the year.
The fourth-quarter pick-up was spearheaded by sturdier fixed investment growth, which jumped to a near two-year high at the end of the year (Q4: +11.7%; Q3: +6.1% yoy). However, household consumption growth fell to an over two-year low in the same quarter (Q4: +3.2%; Q3: +4.0% yoy), thus weighing on the overall result. Meanwhile, government spending growth was largely stable in the final quarter of last year (Q4: +0.5%; Q3: +0.4% yoy).
On the external front, metrics were somewhat more downbeat. Exports lost traction after rebounding in the third quarter (Q4: +2.7%; Q3: +3.5% yoy) as a frail global economy and still-sour trade relations with Russia weighed on external demand. Imports, meanwhile, accelerated in the same period (Q4: +10.2%; Q3: +5.2% yoy), thus further curbing the overall expansion.
Looking forward, the outlook appears increasingly gloomy as the economy is likely to tip into recession this year due to the fast-spreading global 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 coming months. A worse-than-expected coronavirus outbreak and uncertainty over economic and political relations with Russia are key downside risks to the outlook.