Belarus overview

Cityscape at night

Belarus’ political context has been shaped to a significant extent, over the past two years, by changes in the regional geopolitical environment. Since the start of the Ukraine crisis, Belarus has played a constructive role in the region, appreciated by the international community. At the same time, Belarus has moved towards increased international openness, including discussions on the state of affairs regarding democracy and human rights in the country.

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.

As well as being a country where the EBRD works, Belarus is also a donor and a beneficiary of the Northern Dimension Environmental Partnership (NDEP) and benefited from investments in wastewater treatment.

The EBRD’s latest Belarus strategy was adopted on 7 September 2016

GDP forecast for Belarus’s Real GDP growth in 2016 -3.0 per cent

GDP forecast for Belarus's Real GDP growth in 2017 1.0 per cent

Belarus’s economy shrank by 3.9 per cent in 2015 after 19 years of positive growth. All main sectors contracted – mining, manufacturing, construction and agriculture. Recession in Russia and the depreciation of regional currencies exacerbated Belarus’s external imbalances. International reserves declined from US$ 3.9 billion in October 2014 to US$ 2 billion in March 2016 (approximately 1.5 months of imports). Against a backdrop of low international reserves and limited borrowing options, the authorities attempted external and internal adjustments. The Belarus rouble depreciated against the US dollar by 36 per cent in 2015 and by a further 8 per cent in the first quarter of 2016. General government fiscal policy is reasonably tight, although there are contingent fiscal liabilities related to state banks and state-owned enterprises. In the first quarter of 2016, GDP contracted by 3.6 per cent year-on-year, with gross value added in manufacturing – the largest sector of the economy – falling by 4.4 per cent and with construction output falling by 23.6 per cent year-on-year. In March 2016, the Eurasian Fund for Stabilisation and Development approved a US$ 2 billion loan for Belarus, to be disbursed in tranches in 2016-2018 (a first tranche of US$ 0.5 billion was disbursed in March). Taking Belarus’s trade linkages with Russia into account, as well as the structure of the economy, imbalances and refinancing risks, we expect Belarus’s economy to shrink by 3 per cent in 2016 before growing by 1 per cent in 2017.

Belarus in the EBRD’s 2015-16 Transition Report