Belarus: Recovery firms up in Q2
October 2, 2017
The economy picked up speed in the second quarter, as the recovery from a two-year long recession strengthened. Official data released on 2 October by the National Statistical Committee (Belstat) showed that the economy grew 1.7% in Q2 compared to the same period last year. The print was notably above Q1’s 0.4% annual increase and marked the best result since Q3 2014.
Q2’s upturn was supported by buoyant demand in the domestic economy. Private consumption soared 2.7% annually, notably contrasting Q1’s 0.4% decrease. Healthy growth in remittances—thanks to a broader regional recovery—supported household consumption. In addition, government consumption fell at a more modest pace than in the previous period, dropping 0.6% in Q2 (Q1: -1.1% year-on-year). Fixed investment recorded the smallest drop since Q1 2015, contracting 0.3% in Q2.
The external sector, however, did not perform as robustly as the domestic economy. Although export growth picked up from 5.0% annually in Q1 to 5.9% in Q2, imports also shot up, eroding the gains. Imports expanded 8.5% in Q2, notably above Q1’s 4.4% increase.
The recovery is seen firming further in H2 chiefly due to stronger economic activity in Russia, the country’s main trading partner. In addition, slowing inflation will help prop up consumer spending.