Исследовательский Центр ИПМ
Kasrtyčnicki Ekanamičny Forum

Belarus Macroeconomic Forecast, №2(5), December 2012


At the background of a deteriorating external environment – due to both weak growth in main trading partners and a gradually appreciating real effective exchange rate – the role of net exports as an engine of GDP growth has been exhausted. However, the components of domestic demand are still fragile, mainly because of nominal constraints associated with the inheritance of the currency crisis in 2011. Hence, we expect a real GDP growth rate of 2.5% in 2012, and only 2.1% in 2013. Upside risks to this baseline scenario may be caused by attempts of the authorities to stimulate stronger growth, which might be realized through more active domestic demand stimulation. In this regard, we see the attraction of additional foreign investments for capital investments financing as the only realistic tool for stimulating growth without sacrificing macroeconomic stability.

The financial sphere still suffers from a lack of clarity, which is consequent to high and volatile inflation/devaluation expectations. Despite this, the monetary authorities continue to carry out their policy within an “eclectic” regime without a clear nominal anchor. In case of a relatively stable external environment, this policy mix may ensure more or less acceptable inflation of 22.4% (aop) and an exchange rate of USD/BYR 9800 at the end of 2013. However, in case of strong negative shocks, the policy mix might not survive, leading to more significant inflation and devaluation.