Economic and Political Overview

flag Belarus Belarus: Economic and Political Overview

In this page: Economic Indicators | Foreign Trade in Figures | Sources of General Economic Information | Political Outline | COVID-19 Country Response

 

Economic Indicators

On February 24, 2022, Russia initiated a military conflict on the Ukrainian territory, dragging in Belarus as its ally facilitating the invasion of Ukraine, which profoundly upsets the current political context in these countries and will have substantial political and economic ramifications. For the ongoing updates on the developments of Russia-Ukraine conflict please consult the dedicated pages on BBC News.

For the latest updates on the key economic responses from governments to address the economic impact of the COVID-19 pandemic, please consult the IMF's policy tracking platform Policy Responses to COVID-19.

Belarus is an economy in transition, with structural features inherited from the former Soviet bloc. The country is heavily dependent on Russia, which is by far its largest trading partner, and to a lesser extent on Ukraine, whose economic and political situation has exerted a negative influence on the Belarusian economy in recent years. Belarus has traditionally bought gas and oil at a reduced price from Russia and its growth is largely due to the re-export of Russian oil at market prices. Since the end of the Soviet bloc, the growing of the private sector has been modest. The large subsidies granted to state-owned enterprises will no longer, in the short term, be able to increase GDP growth, according to the World Bank. Figures from the IMF show that in 2021 the country’s GDP grew an estimated 2.1%, thanks to the normalization of trade relations with Russia and rising global market prices for hydrocarbons. For 2022, the IMF forecasts a sluggish growth of 0.5%, followed by 1% the following year, curbed by chronic structural problems and the negative effect of Western sanctions.

Since the financial crisis in 2011, Belarus' economy is still influenced by significant internal and external imbalances and is strongly supported by loans from Russia. The economy is therefore very vulnerable to external shocks and suffers from the consequences of the fall of the Russian currency. The country is also dependent on Ukraine and has to deal with the volatility of this market, especially after the diplomatic and military tensions with Russia in early 2022. Concerning public finances, after increasing following the outbreak of the COVID-19 pandemic, the debt-to-GDP ratio started declining in 2021, when it stood at 44.9%. The ratio is expected to follow a downward trend over the forecast horizon, at 44.7% this year and 40.3% in 2023. One of the problems with the debt is that about one-third of it is held in foreign currencies, increasing the risks associated with the depreciation of the Belarusian ruble. The government budget in 2021 recorded a deficit of 3.8% of GDP, and is forecast to decrease to 2.1% for 2022, before turning positive by 0.3% the following year. External inflationary pressures and a loose policy stance triggered contributed to high levels of inflation in 2021: the average annual rate stood at 9.2%, with a forecast of 8.3% and 6.1% in 2022 and 2023, respectively (IMF).

Belarus has relatively low levels of poverty and inequality, with a poverty rate of 4.8% according to the latest figures from the World Bank (though the BEROC Economic Research Center estimated that 21.5% of the total population is living below the poverty line, with the region of Mahiliou particularly being the poorest). In 2021, the GDP per capita (PPP) was estimated at USD 20,578 by the IMF. However, the country suffers from uneven progress in its transition to a market economy and democracy, and the current economic and political crisis threatens to increase the proportion of poor people. Unemployment rose to 4.3% in 2021 and is expected to increase gradually to 4.2% in 2022 and 4% in 2023 (IMF).

 
Main Indicators 201920202021 (e)2022 (e)2023 (e)
GDP (billions USD) 64.4160.2065.7570.6373.24
GDP (Constant Prices, Annual % Change) 1.4e-0.92.10.51.0
GDP per Capita (USD) 6,832e6,398e7,0327,5927,912
General Government Balance (in % of GDP) 0.6-2.4-3.8-2.10.3
General Government Gross Debt (in % of GDP) 41.048.044.944.740.3
Inflation Rate (%) 5.65.5e9.512.614.1
Unemployment Rate (% of the Labour Force) 4.24.14.34.24.0
Current Account (billions USD) -1.25-0.250.26-0.47-0.42
Current Account (in % of GDP) -1.9-0.40.4-0.7-0.6

Source: IMF – World Economic Outlook Database , October 2021

Note: (e) Estimated Data

Main Sectors of Industry

Belarus has several natural resources on its territory: wood, minerals, some small fields of oil and natural gas, granite, limestone, clay, sand, peat and dolomite. Agriculture accounts for 6.8% of the country's GDP and 11% of the working population (World Bank, latest data available). The main agricultural products are beef and pork, poultry, milk and cereals (including potatoes, vegetables, cucurbits and seeds). Belarus is the 3rd-largest producer of rye and flax fibre in the world. The country is also the 7th-largest exporter of butter, the 8th largest exporter of chicken and the 12th-largest exporter of cheese in the world. Nearly 60% of agricultural production is concentrated in highly subsidized state-owned cooperative farms, inherited from kolkhozes (collective farms which formed the basis of the Soviet Union's agricultural policy). Belarusian agriculture is highly dependent on the Russian market to which it exports around 90% of its agricultural products. In 2021, the agricultural production in farms of all types (agricultural organisations, private farms and household plots) stood at BYN 25 billion, down by 4.2% compared to the previous year (Belstat).

Industry accounts for 31.3% of the country's GDP, employing almost 30.4% of the active population. As a former country of the USSR, Belarus has a developed but ageing industrial base that is heavily subsidized. The main industries are machine tools, agricultural equipment, fertilizers, petroleum and chemical products, food products (including beverages and tobacco), prefabricated building materials, motor vehicles, textiles and household goods equipment (such as refrigerators, watches, televisions and radios). The World Bank estimates that the manufacturing sector alone contributes 21.5% of the country’s GDP, mainly thanks to the manufacture of food products and that of coke and refined petroleum products. According to Belstat), In 2021 the volume of industrial production in current prices stood at BYN 154.4 billion, up by 6.5% compared to one year earlier.

The tertiary sector accounts for 49.1% of GDP, showing a sharp rise since the break-up of the USSR. 58.6% of the working population is employed in services. Information technology, transport and logistics are the fastest growing sectors. According to Belstat, in 2021 wholesale turnover reached BYN 130.1 billion (104.4% vis-à-vis 2020), whereas retail turnover stood at BYN 60 billion (+1.6%).

 
Breakdown of Economic Activity By Sector Agriculture Industry Services
Employment By Sector (in % of Total Employment) 11.1 30.4 58.6
Value Added (in % of GDP) 6.8 31.3 49.1
Value Added (Annual % Change) 5.3 -0.3 -2.1

Source: World Bank - Latest available data.

 

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Monetary Indicators 20162017201820192020
Belarussian Rubble (BYR) - Average Annual Exchange Rate For 1 MUR 331.830.060.060.060.06

Source: World Bank - Latest available data.

 
 

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Indicator of Economic Freedom

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:
61/100
World Rank:
95
Regional Rank:
43

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 
 

Country Risk

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Foreign Trade in Figures

The Belarusian economy is both largely state-owned (more than 70% of GDP is generated by public or parastatal enterprises) and very open to international trade, which accounts for 120.7% of GDP (World Bank, latest data available). The main products exported by Belarus are petroleum oils other than crude (9.4%), mineral or chemical potassium fertilizers (8.3%), cheese and curd (3.6%), and motor vehicles for the transport of goods (2.1%). The country’s imports are led by petroleum oils (11.9%), petroleum gas (7.7%), motorized vehicles for the transport of passengers (2.8%), and medicaments (1.7%).

Belarus’ main trading partners in 2020 were the Russian Federation (44.6%), Ukraine (10.8%), Poland (4.3%), Lithuania (3.5%), and Germany (3.1%); whereas imports arrived chiefly from Russia (49.6%), China (11.1%) Germany (5.1%), Ukraine (4.2%), and Poland (3.8%). As a legacy of the Soviet era, during which Belarus was the workshop of the USSR, the Russian and Belarusian production structures remained very complementary. As a result, the Belarusian economy is still strongly concentrated on the Russian market, both as a natural outlet and as its main supplier. Recently, trade ties with China have strengthened, as Beijing is looking for partners for its New Silk Road project; whereas the European Union, Belarus' second-largest trading partner, announced that it would not ratify the bilateral partnership and cooperation agreement with the country due to “Belarus' lack of commitment to democracy and political and civil rights”.

The country’s balance of trade has been fluctuating in recent years. In 2020, Belarus exported USD 29 billion worth of goods (-12% y-o-y) and USD 8.7 billion of commercial services (-8.8%), importing USD 32.6 billion (-17.4% y-o-y) and USD 4.9 billion (-15.6%), respectively (data by WTO). According to figures from the World Bank, Belarus registered a trade surplus of 3.1% of GDP in 2020 (from a deficit of 0.6% one year earlier), thanks to the sharp drop in imports. According to preliminary figures from Belstat, in the period January – November 2021 the turnover of foreign trade in goods totalled USD 73.4 billion (+32.8% y-o-y), of which exports accounted for USD 36.1 billion (+38%) and imports for USD 37.3 billion (+28.2%).

 
Foreign Trade Indicators 20162017201820192020
Imports of Goods (million USD) 27,57334,23538,44039,48032,601
Exports of Goods (million USD) 23,34029,24033,90732,96029,034
Imports of Services (million USD) 4,2474,7725,3995,8424,927
Exports of Services (million USD) 6,8137,8188,8179,6248,775
Imports of Goods and Services (Annual % Change) -1.411.17.35.1-7.2
Exports of Goods and Services (Annual % Change) 2.67.53.81.0-3.1
Imports of Goods and Services (in % of GDP) 62.766.668.965.858.8
Exports of Goods and Services (in % of GDP) 62.566.870.565.161.9
Trade Balance (million USD) -2,511-2,979-2,503-4,193-1,969
Trade Balance (Including Service) (million USD) -9100929-4031,882
Foreign Trade (in % of GDP) 125.2133.4139.4130.9120.7

Source: WTO – World Trade Organisation ; World Bank , Latest Available Data

 

Main Partner Countries

Main Customers
(% of Exports)
2020
Russia 44.6%
Ukraine 10.8%
Poland 4.3%
Lithuania 3.5%
Germany 3.1%
See More Countries 33.7%
Main Suppliers
(% of Imports)
2020
Russia 49.6%
China 11.1%
Germany 5.1%
Ukraine 4.2%
Poland 3.8%
See More Countries 26.2%

Source: Comtrade, Latest Available Data

 
 

Main Products

29.2 bn USD of products exported in 2020
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals (excl. crude); preparations containing >= 70% by weight of petroleum oils or of oils obtained from bituminous minerals, these oils being the basic constituents of the preparations, n.e.s.; waste oils containing mainly petroleum or bituminous minerals 9.4%
Mineral or chemical potassic fertilizers (excl....Mineral or chemical potassic fertilizers (excl. those in pellet or similar forms, or in packages with a gross weight of <= 10 kg) 8.3%
Cheese and curdCheese and curd 3.6%
Motor vehicles for the transport of goods, incl....Motor vehicles for the transport of goods, incl. chassis with engine and cab 2.1%
Tractors (other than tractors of heading 8709)Tractors (other than tractors of heading 8709) 2.0%
See More Products 74.5%
32.8 bn USD of products imported in 2020
Petroleum oils and oils obtained from bituminous...Petroleum oils and oils obtained from bituminous minerals, crude 11.9%
Petroleum gas and other gaseous hydrocarbonsPetroleum gas and other gaseous hydrocarbons 7.7%
Motor cars and other motor vehicles principally...Motor cars and other motor vehicles principally designed for the transport of persons, incl. station wagons and racing cars (excl. motor vehicles of heading 8702) 2.8%
Medicaments consisting of mixed or unmixed...Medicaments consisting of mixed or unmixed products for therapeutic or prophylactic uses, put up in measured doses incl. those in the form of transdermal administration or in forms or packings for retail sale (excl. goods of heading 3002, 3005 or 3006) 1.7%
Parts and accessories for tractors, motor vehicles...Parts and accessories for tractors, motor vehicles for the transport of ten or more persons, motor cars and other motor vehicles principally designed for the transport of persons, motor vehicles for the transport of goods and special purpose motor vehicles of heading 8701 to 8705, n.e.s. 1.5%
See More Products 74.4%

Source: Comtrade, Latest Available Data

 
 

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Political Outline

Current Political Leaders
President: Aleksandr LUKASHENKO (since 20 July 1994)
Prime Minister: Roman GOLOVCHENKO (since 4 June 2020)
Next Election Dates
Presidential: 2025
National Assembly: 2023
Main Political Parties
Political parties in support of the President have a strong chance at securing seats during elections. Opposition parties are allowed to participate in elections, but usually have no real chance of gaining power. Elections are generally marred by electoral fraud, and in the 2019 OSCE observers determined that the election was neither free nor impartial, with problems in the counting of the votes. The latest Presidential elections held in 2020 were contested, with numerous countries refusing to accept the results, including the European Union, which imposed sanctions on Belarusian officials.

The current largest political forces are:

Supporting Lukashenko:

- Belaya Rus: a public association that supports President Lukashenko
- Belarusian Agrarian Party (AP): left-wing, agrarian socialism
- Belarusian Socialist Sporting Party: centre-left
- Liberal Democratic Party (LDP): right-wing, conservative
- Republican Party of Labor and Justice: centre-left
- The Communist Party of Belarus (CPB): left-wing, liaises with numerous other communist parties
- Social Democratic Party of Popular Accord: centre-right, Christian democratic, opposition

Opposition:

- Belarusian Independence Bloc (BNB): one of three major opposition coalitions, formed by 8 parties (BPF Party; Belarusian Christian Democracy (party in process of official registration); Za svabodu ("For Freedom"; social movement under Alexander Milinkevich); Young Front (youth movement officially registered in the Czech Republic); Right Alliance; Razam; Young Belaru; YCSU Young Democrats)
- United Democratic Forces of Belarus (UDF): a pro-European coalition formed by several parties, including Belarusian United Left Party "A Just World"; United Civil Party of Belarus; Belarusian Social Democratic Party (Assembly); BPF Party (Partyia BNF); Za svabodu
- European Coalition Free Belarus: centre-left
- Conservative Christian Party (CCP): centre-right, nationalist, formerly party to the BPF
- Belarusian Green Party: centre-left, green politics.

Type of State
Officially a Republic based on parliamentary democracy, considered authoritarian or dictatorship by Western states.
Executive Power
The President is the Chief of the State and is elected by popular vote for a five-year term, with no term limits. The President holds executive powers. The Prime Minister, Deputy Prime Ministers and the Council of Ministers are appointed by the President and approved by the National Assembly.
Legislative Power
The legislature in Belarus is bicameral. The parliament, called the National Assembly, consists of two chambers: the Council of the Republic (the upper house), consisting of 64 seats, out of which 56 members are elected by regional councils and 8 members appointed by the President, all for four-year terms; and the House of Representatives (the lower house), consisting of 110 seats with all of its members elected by universal adult suffrage to serve four-year terms. The people of Belarus have very limited political rights.
 

Indicator of Freedom of the Press

Definition:

The world rankings, published annually, measures violations of press freedom worldwide. It reflects the degree of freedom enjoyed by journalists, the media and digital citizens of each country and the means used by states to respect and uphold this freedom. Finally, a note and a position are assigned to each country. To compile this index, Reporters Without Borders (RWB) prepared a questionnaire incorporating the main criteria (44 in total) to assess the situation of press freedom in a given country. This questionnaire was sent to partner organisations,150 RWB correspondents, journalists, researchers, jurists and human rights activists. It includes every kind of direct attacks against journalists and digital citizens (murders, imprisonment, assault, threats, etc.) or against the media (censorship, confiscation, searches and harassment etc.).

World Rank:
158/180
 

Indicator of Political Freedom

Definition:

The Indicator of Political Freedom provides an annual evaluation of the state of freedom in a country as experienced by individuals. The survey measures freedom according to two broad categories: political rights and civil liberties. The ratings process is based on a checklist of 10 political rights questions (on Electoral Process, Political Pluralism and Participation, Functioning of Government) and 15 civil liberties questions (on Freedom of Expression, Belief, Associational and Organizational Rights, Rule of Law, Personal Autonomy and Individual Rights). Scores are awarded to each of these questions on a scale of 0 to 4, where a score of 0 represents the smallest degree and 4 the greatest degree of rights or liberties present. The total score awarded to the political rights and civil liberties checklist determines the political rights and civil liberties rating. Each rating of 1 through 7, with 1 representing the highest and 7 the lowest level of freedom, corresponds to a range of total scores.

Ranking:
Not Free
Political Freedom:
7/7

Political freedom in the world (interactive map)
Source: Freedom in the World Report, Freedom House

 

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COVID-19 Country Response

COVID-19 epidemic evolution

To find out about the latest status of the COVID-19 pandemic evolution and the most up-to-date information on the COVID-19 disease in Belarus, please visit the official governmental portal StopCovid (in Russian), as well as the news page of the national Ministry of Health website.
For the international outlook you can consult the latest
situation reports published by the World Health Organisation as well as the global daily statistics on the coronavirus pandemic evolution including data on confirmed cases and deaths by country.

Sanitary measures
To find out about the latest public health situation in the country and the current sanitary measures in vigour, please consult the official governmental portal StopCovid (in Russian), the website of the Belarus Council of Ministers (information is generally available in Russian language), as well as the portal of the Minsk City Executive Committee (in Russian).
The WHO expert mission to Belarus recommended the implementation of stricter sanitary measures to prevent the virus from speading further.
Travel restrictions

The COVID-19 situation, including the spread of new variants, evolves rapidly and differs from country to country. All travelers need to pay close attention to the conditions at their destination before traveling. Regularly updated information for all countries with regards to Covid-19 related travel restrictions in place including entry regulations, flight bans, test requirements and quarantine is available on TravelDoc Infopage.
It is also highly recommended to consult COVID-19 Travel Regulations Map provided and updated on the daily basis by IATA.
The US government website of Centers of Disease Control and Prevention provides COVID-19 Travel Recommendations by Destination.

The UK Foreign travel advice also provides travelling abroad advice for all countries, including the latest information on coronavirus, safety and security, entry requirements and travel warnings.

Import & export restrictions

For the information on all the measures applicable to movement of goods during the period of sanitary emergency due to the COVID-19 outbreak (including eventual restrictions on imports and exports, if applicable), please consult the portal of Customs Authority of Belarus.
The national government decided to lower export duties on oil and petroleum products; as well as to introduce a temporary ban on export of certain goods.
For a general overview of trade restrictions due to COVID-19 pandemic, please consult the section dedicated to Belarus on the
International Trade Centre's COVID-19 Temporary Trade Measures webpage.

Economic recovery plan

To know about the economic measures taken by the Belarusian government to address the impact of the COVID-19 pandemic on the national economy, please visit the website of the National Bank of the Republic of Belarus. To know more about the countercyclical measures aimed at increasing the ability of banks to maintain financial support for the real sector of the economy, click here (in Russian).
For updates on the measures taken by the government, refer to the news page of the official governmental portal StopCovid (in Russian).
For the general overview of the key economic policy responses to the COVID-19 outbreak (fiscal, monetary and macroeconomic) taken by the Belarusian government to limit the socio-economic impact of the COVID-19 pandemic, please consult the section dedicated to Belarus in the
IMF’s Policy Tracker platform.

Support plan for businesses

The government of Belarus has not adopted any specific measure to support businesses so far. The government is studying a package of fiscal measures, not yet announced.
For a general overview of international SME support policy responses to the COVID-19 outbreak refer to the World Bank's Map of SME-Support Measures in Response to COVID-19.

Support plan for exporters

At the moment the official government sources do not provide any information on the specific programs for Belarusian exporting companies put in place by the national government following the COVID-19 epidemic outbreak. For updated information please consult the website of the national Ministry of Economy.

 

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Latest Update: October 2022