Economic Monitor

Economic Monitor Issue 14 | June 2021


  • Real GDP will continue to contract in 2021 (-0.4%) despite global recovery, with forecast uncertainty remaining high
  • In sectoral perspective, the development (5M2021) is extremely heterogeneous: manufacturing +11.6%; construction -14.1%
  • Inflation currently at 9.4% (May-21), well above the target set by the National Bank, which reacted late by raising interest rates to 8.5%. Slight decline in inflation expected towards the end of 2021
  • Strong depreciation of the exchange rate in 2020 (-21%), currently some stabilisation. International reserves at USD 7.8 bn in May-21; import cover remains low (2.4 months)
  • Budget deficit will widen to -3.8% of GDP in 2021, but decline in debt ratio to 45.7% of GDP expected; options for refinancing remain limited
  • Current account deficit of -0.3% of GDP in 2021 remains roughly at previous year’s level
  • After foreign trade contracted in 2020, there is currently (4M2021) a strong recovery due to base and price effects (exports +35%, imports +25%)

Special topics

Government financing. Eurobond yields reflect the uncertainty of the current situation
Administrative price regulations. Such measures are not the right instrument for tackling inflation
Export financing. Timid reform of state export financing initiated
COVID-19. Decreasing case numbers, but still quite high incidence. So far, barely any vaccinations

Download Economic Monitor 14/2021

Economic Monitor Issue 13 | updated March 2021


  • Real GDP fell by only 0.9% in 2020; decline very low in international comparison. In 2021, however, GDP will contract more sharply by -2.7%
  • Relatively soft COVID-19 measures explain the small decline in 2020; however, the ongoing political crisis clouds the outlook for 2021 in this context
  • Inflation (2020: 7.4%) rises above the target, but the National Bank has yet to react
  • Significant depreciation of exchange rate (-21%) despite sale of currency reserves (Feb-21: USD 7.1 bn); import cover drops to 2.6 months
  • Budget balance deteriorated significantly to -4.7% of GDP in 2020. As a result, sharp rise in debt ratio last year (50.9% of GDP)
  • Current account deficit increased in 2020 (-3.3% of GDP); only slight improvement in 2021 (-2.2%)
  • Foreign trade declined in 2020 due to COVID-19, the energy dispute with Russia and the low energy prices; both exports (2020: -11.9%) and imports (-17.4%) very weak

Economic Monitor Issue 12 | June 2020


  • Due to the COVID-19 pandemic, the economy is forecast to shrink by 6.0% in 2020. In 2021, real GDP will grow by 3.5%
  • The main negative impact comes from the external side, where oil-related problems with Russia and low global energy prices reinforce the shock. Contrary to most other countries, domestic lockdown measures are rather weak
  • Inflation remains under control (2020: 6.5%), and the National Bank continues to cut the key interest rate. Real wages keep growing in the run-up to the presidential elections
  • All the factors mentioned put pressure on the budget: balance will deteriorate significantly in 2020 to -4.6% of GDP. Correspondingly, the debt ratio will jump in 2020 (59.6% of GDP)
  • The exchange rate weakened significantly during 5M 2020 (-14.5%), and the national bank had to sell foreign exchange reserves (latest: USD 7.9 bn); import coverage dropped to 2.6 months
  • Current account deficit will widen in 2020 (-2.9% of GDP), before improving slightly in 2021 (-2.5%)
  • External trade will take a hit in 2020, as both exports (4M 2020: -19.1%) and imports (-20.6%) shrink among the global COVID-19 crisis, the energy dispute with Russia and low global energy prices

Economic Monitor Issue 11 | January 2020


  • Investment study: Identification of 35 proposals by German businesses to improve investment climate in Belarus
  • New initiatives to support SMEs: New approaches for financial SMEs support are being discussed as part of a new reform agenda. Focusing growth-oriented SMEs appears to be reasonable.
  • Agricultural exports: Exports of products of animal origin are heavily concentrated on the Russian market. Diversification encouraged, especially dairy products have potential.