Page 5 - BELRptDec18

1.0 Executive summary
Belarus is currently enjoying the fastest growth in the Commonwealth of Independent States (CIS). Moreover, the government is demonstrating a measure of prudence, taking advantage of the relatively good macroeconomic conditions to pay down external debt.
In January-October 2018 Belarus' GDP went up by 3.5% from the same period a year ago, according to the National Statistics Committee of Belarus. According to the first assessment, the country's GDP in money terms totalledbnY100.6bn, or 103.5% in comparable prices against January-October 2017. In January-October 2018 the GDP deflator index made up 112.5% as against the same months in 2017.
The European Bank of Reconstruction and Development (EBRD) expects real GDP to reach 3.0% in 2018 and then fall to 2.5% in 2019, while cautioning that growth continues to depend on the extent of structural reforms and the dynamism of the private sector in value creation.
According to the same report, real wages and disposable income increased by 12.6% y/y while in the same period Belorussian exports increased 18.3% in $terms. Interestingly, export flows to the EU increased by 43% y/y to the point where EU-bound exports now represent 31.4% of the total.
Incomes are rising steadily and creating a middle class. On the back of this growth Belarus’s leading supermarket chain Eurotorg (aka Euroopt) attempted the republic’s first ever IPO in November, but the listing failed due to poor market conditions.
The external sector is also doing well with the Republic running a trade surplus . Exports totalled $31.06bn while imports exceeded $30.2bn (up 18.1%) giving Belarus a foreign trade surplus of $861.9mn.The government has promised to use all this surplus to pay down debt, although it intends to refinance 75% of its external debt.
The black cloud on the horizon is Russia’s intention to change petrol duties that could cost the Belarusian budget billions of dollars . In effect the cash strapped Russian government is slowly withdrawing the subsides it grants the republic. The IMF warned Belarus to have a “plan B” ready in case all this extra money disappears.
5 BELARUS Country Report December 2018 www.intellinews.com