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Belarusian economy contracts in January

Belarus's gross domestic product in January decreased by 1.9% compared with January 2019, Belstat reports. GDP at current prices amounted to 10.4 billion rubles. The fall is due to a decrease in petrochemicals output amid problems with Russian oil supplies and a decline in potash fertilizer production.

Various authorities have strongly differing estimates of the growth level in 2020. The government raised the forecast for the growth of the Belarusian economy in 2020 from 2.5% to 2.8%. The head of the National Bank of Belarus, Pavel Kallaur, is confident in the realistic conservative forecast for GDP growth in 2020 at 1.9%, which the Ministry of Finance put into the draft budget for the current year.

International financial institutions are skeptical about the future of the Belarusian economy and forecast its growth at the level of 0.5-1%.

Experts note that the potential for economic growth will decrease by an average of 0.8-1.1 percentage points until 2024 due to the permanent shock of losses from the tax maneuver in Russia relative to the potential growth of 2% per year in the absence of a tax maneuver. The equilibrium growth rate in the next few years will be 0.9–1.2%.

Belarus's gross domestic product in 2019 grew by 1.2% compared to 2018.

The more interesting question for many businesses is how the BYN/USD/EUR exchange rate will develop in the next year. In the last month the BYN has devaluated by approximately 4 %. Currently the most sceptical forecasts are for the BYN to fall up to 30 % until the end of the year.


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