World Bank says Russian tax maneuver may cause recession in Belarus

The World Bank has forecast a lower growth of the Belarusian economy in 2019-2021 and does not rule out a recession if there is no compensation for the costs of the Belarusian oil refining as a result of the Russian oil tax maneuver.

“Without compensation, growth will slow to below 2%, the current account deficit may increase and additional budget consolidation will be required. In the worst case, due to the lack of compensation from Russia, the economy may slip into recession through a reduction in petrochemical production, together with deterioration in budget accounts and external position,” the World Bank report published in April 2019 says.

At the same time, the World Bank experts explain that the forecast for the growth of the Belarusian economy in the medium term at 2% is based on the assumption that at least half of the expenses from the tax maneuver will still be compensated, reports.

The Kremlin, in turn, refuses to compensate the losses of the Belarusian budget accrued in connection with the tax maneuver. Russia links the issue of subsidies to Belarus with closer integration.

Москва продолжит выдавать кредиты, но ВВП изменится. Что ждет экономику перед президентскими выборами

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