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 2018 3.0%

GDP forecast for Belarus’s Real GDP growth in 2019 2.5%

In Belarus, economic growth gained pace at the start of 2018 but moderated somewhat in the following months. After a 2.4 per cent growth in 2017, real GDP growth accelerated to 5.2 per cent year-on-year in the first quarter of 2018. By the end of the third quarter the rate of growth slowed, although it remained relatively brisk at 3.7 per cent year-on-year. Strong external demand and expanding household consumption contributed to broad-based growth. In the first nine months of 2018, output increased in all production sectors except agriculture where it declined by 1.6 per cent year-on-year. Services accounted for around 60 per cent of gross value added as of the first half of 2018, with the ICT and hospitality sectors demonstrating above-10 per cent real growth rates in this period. Real wages and disposable incomes increased by 12.6 per cent year-on-year and 7.8 per cent year-on-year respectively in the first eight months of 2018. In the same period, export of goods from Belarus went up 18.3 per cent in US dollar terms, with flows to the EU market increasing by 43.0 per cent year-on-year and representing 31.4 per cent of total. Inflation declined further to 4.8 per cent year-on-year in the first nine months of 2018 from an average of 6.0 per cent last year. The exchange rate has remained stable. The National Bank of the Republic of Belarus lowered the refinancing rate further from 11 per cent at the end of 2017 to 10 per cent in June 2018. We forecast Belarus’s real GDP to grow by 3.0 per cent in 2018 and by 2.5 per cent in 2019. Growth prospects continue to depend on the extent of structural reforms and on the ability to expand the private sector’s role in value creation.

Belarus in the EBRD’s 2018-19 Transition Report