Page 6 - BELRptNov18

1.0 Executive summary
Belarus currently has the fastest GDP growth rates in Eastern Europe
and that is creatina middle class. GDP grew by 4.4% year-on-year in January-July, following a 4.5% y/y growth in the first half of the year, which compares to 1.8% in Russia and 3.6% in Ukraine. However, growth eased somewhat in the third quarter. Belarus' GDP grew by 3.7% year-on-year in January-September following the same growth in January-August (and a 4.4% y/y growth in January-July), according to the national statistics agency Belstat.
The Belarusian economy is recovering well on the back of the ongoing recovery in neighbouring Russia, which still dominates the republic’s economic fortunes.
Belarus' GDP made up BYN55.9bn ($25.9bn) in H1 2018, up 4.6% from the same period in 2017, according to an update of date from the National Statistics Committee on October 5.
Belarus is also looking for new sources of funding and has plans to issue a so-called Panda bond in China. "The process is under way," Deputy Belarusian Finance Minister Yury Seliverstov told reporters on March 28.
Minsk has also been talking to the IMF about a possible programme, however, the Belarusian leadership is so allergic to being told what to do, and IMF money always comes with lots of strings attached, a deal remains highly unlikely.
Russia remains the mainstay in the republic’s borrowing plans, which include refinancing some 75% of its debt .
The government has taken a leaf our of Russia’s debt book and is using the current benign external conditions to pay off debt, which is sinking slowly. The external state debt of Belarus totalled $16.6bn as of September 1, down by $173mn or 1% from early January, according to the Finance Ministry in Minsk, due to a $600mn placement of a 12-year Eurobond with a 6.2% coupon. Belarus also borrowed $614mn from Russian banks and the government.
International ratings agency Standard & Poor’s (S&P) recognized this policy and rewarded the country by keeping rates on hold. “Belarus’ external imbalances will not escalate while the fiscal stance remains comparatively tight over the next 12 months, and that the government will retain market access and support from Russia to refinance upcoming public debt redemptions” the agency said in October.
Nevertheless, the country’s reserves remain under pressure due to foreign debt redemptions: foreign currency reserves fell by $320mn to $6.93bn at the end of September due to the external debt related repayments, but they are much stronger than two years ago when they dropped to a low of $4bn.
On the macro front the numbers remained decent and under control.
The board of the National Bank of Belarus (NBB) has confirmed its recent estimates that the 2018 annual inflation in the country will stay below projections and coming at about 6% this year. In September, the annual
6 BELARUS Country Report November 2018 www.intellinews.com