Updated at 18:49,15-10-2021

World Bank: Belarus economy in recession, GDP to grow only in 2017, outlook dim

Belsat.eu, following BelTA

The World Bank expects that the GDP growth will resume in Belarus only in 2017, World Bank senior economist Ruslan Piontkivsky said at the presentation of a review on the impact of the WTO accession for Belarus.

“In 2015 our expectations remain the same: the GDP will fall by 3.5% by the end of the year. In 2016 the fall will continue but at a softer pace: 0.5%. In 2017, we expect that the GDP growth will resume but it will be insignificant, at the level of 1%,” state-run news agency BelTA quotes Ruslan Piontkivsky as saying.

According to the representatives of the World Bank, the prospects for economic recovery in 2017 look more favorable, despite a continued downturn in 2016 in case the government continues sound macroeconomic policies and macroeconomic reforms with some support from the outside.

“In general, the predictions for 2016 and 2017 are uncertain as much depends on the dynamics of oil prices and the economic situation in Russia and Ukraine,” the document reads.

Presenting the economic review on Belarus, Ruslan Piontkivsky stressed that the Belarusian economy is currently in recession: due to the weak domestic and foreign demand, the real production is reducing for the first time in the last 20 years. In his words, the country’s current account deficit has been reducing due to the recession and the present macroeconomic policy.

The country still needs external financing to pay out foreign debts. According to the World Bank, the key task for the country today is to ‘avoid a trap of low growth while addressing the accumulated structural problems’. Among the latter ones the World Bank named a high level of the state’s interference in the economy, low efficiency of state-run companies, and macroeconomic imbalances.

“Until recently the main efforts were aimed at the technological modernization of certain industrial sectors on the government’s initiative. At the same time scant attention was paid to other aspects of economic efficiency of companies,” the WB review says.

In January-September 2015, the country’s gross domestic product fell by 3.7% in comparison with the same period last year to make up Br635.8 trillion, the Belarusian National Statistics Committee reports.