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Belarus Economic Update – November 2015

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  • November 2015


Weak external and domestic demand put the Belarusian economy in recession, which is likely to continue in 2016. The major challenge is to escape a low-growth equilibrium by addressing long-standing structural problems. Over the medium run, growth can be spurred by appropriately sequenced reforms, supported by international partners and investors.

Recent Economic Developments

The Belarusian economy is in recession with real output contracting for the first time since 1995 due to weak external and domestic demand.

Labor market outcomes worsened with the recession.

Inflation is declining, due to adoption of a base-money targeting regime.

Current account deficit is narrowing due to the recession and macroeconomic adjustment, but significant external financing is required to meet large foreign debt repayment needs.


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Medium-term Outlook

Belarus’s economic outlook remains bleak, with real GDP projected to decline by 3.5 percent in 2015 and by at least 0.5 percent in 2016.

The major challenge is to escape a low-growth equilibrium by addressing long-standing structural problems.

Growth can be spurred by appropriately sequenced reforms, supported by international partners and investors.

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