Belarus

Capital: Minsk

Local time:
It is %T:%M %A in Minsk

GDP growth rate: 3.8% in 2013

FDI stock: 9 940 million USD in 2010

Economic trends

Even today, Belarus' economy remains an economy in transition, inherited from the former Soviet block. After its independence in 1991, Belarus slowly adopted market-economy reforms, and in particular numerous privatizations. The country has always maintained close relations with Russia. Since 2005 and the accession of Loukachenko to the power, the country, which had adopted a "market socialism", has re-nationalized many private companies and the pressure from the part of the government has become stronger in the business field: arbitrary changes in regulations, numerous inspections, arrest of businessmen and factory owners. 

Belarus obtains gas and oil from Russia at a reduced price and its growth comes largely from the re-exportation of Russian oil at market price which has created a source of tension with Russia.  Its trade with Russia, by far its most important partner, diminished in 2007. Russia has introduced a customs duty on petroleum products exported into Belarus. Russia also increased the price of gas from USD 47 per cubic meter to USD 100 in 2007 and it is expecting to sell it at market price by 2011. This recent Russian policy of raising Belarus' energy prices to world market levels should create, as a consequence, a slowdown in Belarus' economic growth over the next few years.

Some political decisions, notably the establishment of fiscal measures to improve energy efficiency and to diversify exports, have been implemented. Nonetheless, borrowing has been the primary mechanism used by the government in recent years to limit the growing pressure on the economy. Belarus has been affected by the global economic crisis and even though the country had broken up all connections with the IMF in 2004, it requested a loan at the end of 2008. Thus Belarus obtained this way USD 2.5 billion in financial aid to cope with the effects of the crisis. 

Officially, Belarus has experienced a large growth these recent years, attaining a rate of 6% in 2010.  But the effects of the global crisis have been severely felt , most of all in the industrial sector.  The aid accorded by the IMF provoked a devaluation of the Belarusian ruble by 40% without positive results on the GDP.  The GDP reached 10% in 2008, but its growth contracted to 0.2% in 2009. 

It is important to note that the Belarus' official figures are subject to question, such as the unemployment rate which was announced at only 1%.

Main branches of industry

Agriculture contributes to around 9.2% of the country’s GDP and employs 14% of the active population. 

The industry sector accounts for 41.8% of the GDP and employs 34.7% of workers.  The main industries of Belarus are machine tools, agricultural equipment, fertilizers, chemical products, prefabricated construction material, motor vehicles, motorcycles, textiles and some consumer products (such as refrigerators, watches, televisions, and radios).

The tertiary sector contributes around 50% to the GDP and employs 51.3% of Belarusian workers.

International trade

Between January and June 2008, Belarus’ foreign trade in goods increased by almost 60%, compared to January-June in 2007, and reached more than USD 36 billion.

The export of goods increased to nearly 62%, attaining USD 17.3 billion. However, this trend did not continue in 2009 due to the reduction of global demand. Belarus main clients are Russia (33%), the Netherlands (13%) and Ukraine (8%).

As for imports, they increased by 55%, attaining nearly USD 20 billion.  Its main trade import partners are Russia (56%), Germany (8%), Ukraine and China (4%).

Belarus' trade balance remains highly negative, mainly due to the increase in the price of oil sold by Russia.  As a fact, Russia remains Belarus' main trade partner.