Page 61 - Eastern Europe Outlook 2020

The Belarusian Economic Research and Outreach Center (BEROC) said that growth may accelerate to 2% y/y in 2020 because the government plans to raise wages in the run-up to next year's presidential election. In the midterm, however, growth will stay at 1-2% y/y without structural reform, according to BEROC, Minsk-based news agency BelaPAN reported in December.
Just how fast Belarus grows in 2020 will also depend a lot on how successful Moscow is at boosting Russia’s growth as the two economies are joined at the hip​. Russia accounts for 35% of Belarus’s exports and 58% of imports, as well as 30% of incoming FDI.
Renaissance Capital predicts that Belarus’ economy will grow by 2.5% in 2020, largely lifted by better than expected growth in Russia, as Rencap has an above consensus forecast for 2.5% growth in Russia against the consensus of 1.8%.
“We expect growth in Belarus to moderate to 1.5% y/y in 2019 and rebound to 2.5% in 2020. 2019 was a challenging year for Belarus, mostly due to external headwinds related to Russia. This included the effects of: 1) softer economic growth in Russia; 2) the contamination of the Druzhba oil pipeline; and 3) the oil tax manoeuvre in Russia. The first two should reverse in 2020, while we expect the latter to remain in place for five years to come,” Rencap said in a report.
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