Belarus overview

Cityscape at night

The European Bank for Reconstruction and Development has adopted a new four-year strategy for Belarus, which outlines the Bank’s investment priorities in the country.

The strategy notes that in the recently changed regional geopolitical environment Belarus has engaged in greater international openness and become more willing to discuss domestic political developments, including the human rights situation in the country.

These positive developments, as well as the international response to these steps, have created a new political context for the Bank’s operations in the country and provide an opportunity for enhanced engagement with the Belarusian authorities.

In Belarus we focus on:

The EBRD is prepared to support concrete reform initiatives of the government with investments and technical assistance to develop the private sector, promote privatisation and enhance the sustainability of public infrastructure through commercial solutions. The strategy identifies the following strategic areas:

  • Enhancing the competitiveness of the real economy: The EBRD will seek to provide long-term debt and equity financing to local and foreign investors as well as support small and medium-sized business (SME) lending through the development of a sustainable commercially oriented banking sector. It will continue providing advice to SMEs to strengthen their competitiveness. The Bank will also promote the privatisation of state-owned enterprises by strategic investors, which can provide capital and know-how to improve competitiveness and productivity.
     
  • Enhancing the sustainability and service quality of public infrastructure: The EBRD will encourage private sector participation in the provision of public infrastructure services. The Bank will also seek to support well-defined reform initiatives of the government in the municipal, transport, power and energy sectors through its investments and technical assistance. Implementing these directions consistent with the Bank’s Green Economy Transition (GET) approach, the EBRD will also seek to assist Belarus’ transition to a low carbon economy, where public and private investments are made in a way that minimises the impact of economic activity on the environment.

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 benefits from investments in water supply and wastewater treatment.

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

GDP forecast for Belarus’s Real GDP growth in 2017  1.5 per cent

GDP forecast for Belarus’s Real GDP growth in 2018 2.0 per cent

Belarus’s economy is growing again after two years of recession. In the first nine months of 2017, GDP grew by 1.7 per cent year-on-year, driven by a recovery in external demand. Output in manufacturing, the economy’s largest sector, grew by 6.6 per cent year-on-year. Stabilisation of the exchange rate, weak domestic demand, moderation in wage growth as well as generally conservative macroeconomic policies have all helped to bring the inflation rate down to 4.9 per cent year-on-year in September 2017, which is the lowest level in recent years. The near-term economic outlook has improved due to resolution of the gas price dispute with Russia, agreement to restore crude oil supplies to Belarus to ordinary annual volumes, resumption of disbursements by the Eurasian Fund for Stabilisation and Development and successful placement by Belarus of sovereign Eurobonds for the principal amount of US$ 1.4 billion in June 2017. These developments have helped to mitigate short-term funding pressures. However, downside risks remain and the growth prospects continue to depend on the extent of structural reforms. We forecast the economy of Belarus to grow by 1.5 per cent in 2017 and 2.0 per cent in 2018.

Belarus in the EBRD’s 2017-18 Transition Report