Belarus overview

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Cityscape at night

Since 1996 the EBRD’s activities in the Republic of Belarus have been limited by the country’s uneven progress in democratic and market-oriented transition. Previous Country Strategies have highlighted concerns about the Belarusian authorities’ commitment to and application of the principles of multiparty democracy, pluralism and market economics, as contained in Article 1 of the Agreement Establishing the Bank. As a result of the difficult operational environment, the EBRD’s engagement with Belarus has been constrained.

For now, in Belarus we focus on:

Promoting private sector development across all sectors of the economy, both directly and indirectly. The EBRD’s priorities in this area will include supporting the transparent privatisation of state-owned entities and assets; assisting partner banks to deepen financial intermediation in underserved segments and geographic areas and improve access to finance by MSMEs; and continuing to engage the authorities through policy dialogue to implement structural reforms that support private sector development and improve the country’s investment climate.

Commercialisation of the financial sector, the EBRD will offer operations to private and foreign-owned banks, and consider supporting non-bank financial institutions to further broaden access to finance by private sector players.

Ensuring the economy becomes more energy efficient over time, the EBRD will offer new instruments to Belarusian companies, via partner banks, and technical cooperation support to the participating institutions in order to develop necessary human resource capacity and skills.

Possibly extending the existing Environmental Infrastructure Facility to other municipalities and/or engage in other municipal sectors that benefit the environment and have tangible and direct benefits for the local population such as solid waste management. Policy dialogue on structural reforms will continue to be an inherent part of the EBRD’s activities in the municipal sector.

The EBRD’s latest Belarus strategy was adopted on 12 March 2013

GDP forecast for Belarus’s Real GDP growth in 2015 -3.5 per cent

GDP forecast for Belarus's Real GDP growth in 2016 -1.0 per cent

Belarus’s growth turned negative in 2015 for the first time after 19 consecutive years of positive growth in 1996-2014. While the economy grew by 1.6 per cent in 2014, in the first nine months of 2015 it shrank by an estimated 3.7 per cent year-on-year, affected significantly by the recession in Russia. Foreign currency reserves declined from US$ 3.9 billion in November 2014 to US$ 2.1 billion at end-September 2015, providing just one month of import coverage. To mitigate external imbalances, the authorities attempted external and internal adjustments tools. The general government balance posted a surplus in January-June 2015, with the surplus earmarked mainly towards the repayment of foreign exchange liabilities. Despite initial heavy administrative measures, in December 2014 the central bank abandoned its crawling peg in the context of depreciation of the Russian rouble. In January-October 2015, the Belarus rouble depreciated against the US dollar by approximately 30 per cent, with a resulting impact on real and financial sector balance sheets. The current account deficit declined from 6.7 per cent of GDP in 2014 to an estimated 1.9 per cent of GDP in the first half of 2015. General government gross debt increased to approximately 40 per cent of GDP in 2014. We downgrade our Belarus GDP growth forecast to -3.5 per cent in 2015 and -1 per cent in 2016.

Belarus in the EBRD’s 2015-16 Transition Report

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