Newsletter Issue 70 | May – June 2021

High degree of uncertainty clouds economic prospects

After contracting by a comparatively low 0.9% last year, the Belarusian economy is currently showing signs of recovery: in the first 5 months of the year, GDP grew by 3.1%. However, this development should not be overestimated, as it is mainly driven by base effects. For the year as a whole, a further GDP decline of 0.4% and rather a stagnation of the economy should be expected from today’s perspective. However, this outlook is accompanied by a very high degree of uncertainty. The currently discussed economic and financial sanctions by the EU and possible actions by other countries will be an important factor, even though the exact extent of their impact is not yet fully foreseeable. The current tensions in the wake of the political crisis can be seen most clearly on the Eurobond market, where yields on Belarusian government bonds have recently risen significantly.

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