Belarusian economy on verge of collapse

The Belarusian economy has grown more than 5% in the first quarter of this year, the National Statistics Committee reports. This way, the Belarus’ GDP is growing two and a half times faster than that in developed countries.

Speedy growth has been reported over the past seven years. In the first quarter of this year, Belarus’ economic growth only slightly fell short of the rate of 2011.

However, at the end of the year, it is expected to grow modestly. It is due to the fact that in the first quarter of last year there was a peak of the oil and gas war between Belarus and Russia, when Moscow significantly cut oil supplies to our country. Last April, these supplies were resumed, so on the background of 2017, the current figures look less impressive. Just over 3% is about world average.

Economic growth this year is promoted by the continuous oil price increase, which has been in place since the middle of last year. Belarus sells its oil as well as the raw hydrocarbons to the West — both its own and those re-exported Russian — at a higher price. Excess profit from oil exports also helped recover the Russian market, which consumes more Belarusian machinery and food.

However, in absolute terms, the size of the Belarusian economy this year may only reach the level of 2010. In US dollar terms, the Belarusian GDP is still one and a half times smaller than before the latest crisis.

According to experts, to rise to the pre-crisis level of 80 billion dollars, let alone the 100 billion mentioned by Alyaksandr Lukashenka, from the current 57 billion is an unrealistic task for the foreseeable future. The World Bank predicts a slowdown of the global economy, and with it the fall in oil prices in the next 2-3 years. After that, the domestic economy may once again fall even below the current level.

Stanislau Ivashkevich

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