Economic outlook 2018: Continued recovery
The economic development of Belarus in 2017 was better than expected. After several years of negative growth, GDP returns to positive growth, amounting to 1.7% in 2017.
Under the assumption of stable world market prices for commodities and solid export demand, especially from Russia, this growth trend is to continue in 2018. Inflation will be one-digit also in 2018, provided that the National Bank of Belarus will continue its stability oriented monetary policy. The solution of the energy conflict with Russia, resumed payments of the Eurasian Stability and Development Fund and the issuance of Eurobonds in the amount of USD 1.4 bn in June 2017 have significantly relieved financing pressure at least in the short run. However, growth rates as projected for 2017 and 2018 are clearly insufficient to get the economy back to the level prior to the crisis of 2014 any time soon. To reach this aim, higher and
– most important – more sustainable growth rates would be necessary. In the medium and long term risks related not only to the inefficient sector of state enterprises, but also to the reduced but continued practice of directed lending and also the strained state budget impede a more optimistic outlook.
