Belarus: Recovery shifts into a lower gear in Q2
September 28, 2018
Although the economy expanded robustly in the second quarter, it lost some momentum following the strong outturn at the beginning of the year. According to a preliminary estimate released by the National Statistical Committee (Belstat), second-quarter GDP rose 4.0% over the same period of 2017, decelerating from Q1 when annual growth hit 5.2%, which was a near seven-year high.
The recovery in Q2 was propped up by solid domestic demand dynamics: Household consumption led the expansion in the quarter (Q2: +10.3% year-on-year; Q1: +8.9% yoy). Government consumption growth, on the other hand, slipped further into negative territory in the second quarter (Q2: -1.8% yoy; Q1: -1.5% yoy), while fixed investment decelerated markedly compared to the previous quarter (Q2: +7.0% yoy; Q1: +17.0% yoy).
On the external front, challenging economic conditions in Russia—Belarus’ largest export market—weighed on the sector’s performance. The external sector’s contribution to the overall GDP growth slumped to minus 13.9 percentage points in Q2 from minus 0.5 % in Q1, and was chiefly behind the slowdown in economic growth in the quarter.
Author: Almanas Stanapedis, Economist