The growth rate of the Belarusian economy remains low. This is due to the inflexible economic structure, stagnation in traditional export markets and uncertainty about compensation for the tax maneuver. The issues were presented and discussed at the presentation of the World Bank’s semi-annual Economic Review for Belarus.
In 2020, GDP growth may reach 0,9%, in 2021 – 0,5%.
According to the World Bank, growth prospects in the coming years remain poor due to deteriorating terms of trade, limited opportunities to stimulate domestic demand and structural obstacles. The outlook takes into account that Belarus might not receive compensation for the tax maneuver from Russia. Earlier, World Bank experts were more optimistic and even suggested the growth of 1-2%.
At the same time, World Bank economist Kirill Gaiduk noted that positive shocks are expected for the economy due to liberalization of the business environment for the private sector in 2017–2018. Alex Kremer, the head of the World Bank’s office in Belarus, advised increasing competitiveness, especially of state-owned enterprises, and thereby increasing export volumes and geography.
In January-October 2019, Belarus’s GDP grew by 1.1% compared to the same period last year. At the end of the year, authorities predicted an increase of 4%. The local economy stalled after the poor Russian oil situation that reduced fuel exports. Among other factors are the cancellation of the supply of dark petroleum products from Russia and the decrease in export prices for potash fertilizers, oil and petroleum products.
The government, on behalf of President Alexander Lukashenko, growth projections were raised from 2.5 to 2.8% in 2020. The National Bank of Belarus sees the outlook for growth of the economy in 2020 at 1.9% put by the Ministry of Finance into the draft budget for next year as realistic.