Belarus 

Belarus country policy

Policy established 21 May 2011

• Cover suspended

Country class: 7

Belarus country facts

Atradius Dutch State business Economic Research 
Country Report last updated :  7 July 2011
Country :  BELARUS  

Political Situation
 
Authoritarian Rule

Head of state
President Alyaksandar Lukashenka.

Form of government
Government of the Communist Party of Belarus (CPB) and the Agrarian Party, headed by p.m. Syarhei Sydorsky.

Internal Economic Situation
Centrally Controlled Economy

General situation
After the near-standstill in 2009 (+0.2%), strong economic recovery as evidenced by real GDP-growth of 7.6% in 2010 and even 10.9% in 2011Q1 thanks to a brisk expansion of private consumption and public sector spending ahead of the elections. A decline of 2.8% in 2009 was followed by a rise in industrial output by 11.3% in 2010, except for lower oil refinery output. Despite this spurt, economic structure remains poor in view of the unrestructured manufacturing sector: about 1 out of 4 industrial companies is said to be loss-making. Weak state controlled banking sector with too much foreign currency borrowing. Despite price controls re-emergence of inflation (to 13.9% yoy in March 2011) because of higher food prices and a more loose economic policy.

EXTERNAL ECONOMIC SITUATION : PRECARIOUS LIQUIDITY SITUATION

Main sources of foreign exchange
Re-exports of gas and oil; industrial products.

Main foreign markets
EU (44%), Russia (40%), Ukraine (6%).

Main expenses of foreign exchange
Energy and raw materials.

 
Balance of payments 
After the drop in 2009 exports are recovering but less fast than imports, contributing to an unaltered weak external position with large current account deficits. Minor FDI and (multilateral) borrowing have to finance these deficits. In 2011 reserves have fallen sharply, urging forex-restrictions and a de facto devaluation in April.