Belarusian economic problems appeared before epidemic

This conclusion is contained in the review "Economy of Belarus in February-March 2020" prepared by the experts of the research company InComeIn.

In January-February 2020, Belarus; GDP amounted to 99.4% in comparable prices as against January-February 2019. For the last time, Belarus' GDP fell at the beginning of 2017. It was due to the Belarus-Russia conflict in the energy sector, too.

There are the main factors influenced the Belarusian economic decline in January-February 2020:

- reduced Russian oil supplies;

- lack of compensation for Belarus due to tax maneuver in Russia;

- lack of a new contract for the supply of potash fertilizers with China;

- reduced external demand for Belarusian goods;

- increased stocks;

- weakened Belarusian ruble;

- increased interest rates on new credits in rubles and in currency;

- reduced borrowings of business entities in currency;

- reduced gold and foreign exchange reserves and difficulties with attraction of new borrowings both in the external and domestic markets.

The output reduction by Belarusian oil refineries due to decrease in oil supplies by Russian suppliers led to a 40% drop in the industrial production index in oil refining. The absence of new contracts for the supply of potash fertilizers with China reduced the chemical production index by almost 20%.

The reduction in turnover in the petrochemical sector led to losses in wholesale trade and transport, as well as to decreased budget revenues.

The warm weather in January-February of this year had a double effect on Belarus' GDP. On the one hand, warm winter resulted in decreased GVA index of electricity, gas, steam, hot water, and air conditioning supply. On the other hand, warm weather helped accelerate growth rates in construction and agriculture. Also, information and communication made a positive contribution to the GDP growth in January-February. It should be noted that growth in construction and agriculture was positively influenced by the last year's low base.

The consumer price index slightly slowed down in February of this year compared to February 2019. At the same time, the main increase in prices was provided by goods, prices for which are regulated by the state, primarily for housing and public utility services.

The acceleration in the growth of ruble indebtedness in February is explained by the greater attractiveness of ruble credits against the background of the Belarusian ruble weakening. For the same reason, currency indebtedness of business entities began to reduce. Increased interest rates on currency credits were an additional factor. It should be noted that state support for the cement industry and woodworking resumed in February after a break in January.

In the structure of changes in debt to state banks and private banks in January-February of this year, the main growth in ruble and currency debt was still provided by private banks. Moreover, the share of individuals in the growth of ruble debt to banks in January of this year is 1.4 times more than the share of business entities. The share of housing construction credits in the growth of individuals' ruble debt to banks was almost 2.4 times more than the share of consumer credits.

It should be noted that growth in consumer credit debt in February is a common occurrence before another weakening of Belarusian ruble. As a result, the retail trade grew and the ruble deposits slowed down.

The financial standing of enterprises worsened at the beginning of this year because the national currency weakened. The growing real wages are another negative factor.

Gold and foreign exchange reserves remain the only sources of currency in the country since attempts to attract currency resources in both foreign and domestic market were unsuccessful in March. Although the payments of government bonds amount to about USD 400 million in the next two months when the gold and foreign exchange reserves decreased by USD 1.6 billion or more than 20% in Q1, the risks of further devaluation remain high.

This means that Belarus will continue to try to move away from quarantine and keep the economy from serious contraction in the near future, hoping that the main trading partners will have time to at least partially restore their economies.

Main macroeconomic indicators


January 2020

February 2020

January-February 2020

1. Gross domestic product, in % of the appropriate period of the previous year




2. Industrial output, BYN million (in current prices)




3. Industrial production index, in % of the appropriate period of the previous year




4. Retail turnover, BYN million (in current prices)




5. Retail turnover index, in % of the appropriate period of the previous year




6. Capital investment, BYN million (in current prices)




7. Capital investment index, in % of the appropriate period of the previous year




8. Consumer price index, in % of the previous month




9. Consumer price index as against December of the previous year on an accrual basis, in %




10. Price index of manufacturers of industrial products, in % of the previous month




11. Price index of manufacturers of industrial products as against December of the previous year on an accrual basis, in %




12. Balance of foreign trade in goods

(preliminary data)

Exports of goods, USD million




Imports of goods, USD million




Balance, USD million




See the detailed economic analysis for February-March 2020 and the short-term forecast in the review "Economy of Belarus for February-March 2020" prepared by the research company InComeIn.

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