Исследовательский Центр ИПМ
Kasrtyčnicki Ekanamičny Forum

Belarus Macroeconomic Forecast, №1(12), June 2016

In 2016, the economy is going through a process of ‘adjustment by recession’. There are numerous reasons for the current recession. First, and the most powerful, are de-pressed investments. The firms are reluctant to invest, having in mind the poor growth potential and low expected returns on investments even in case of an improving ex-ternal environment. Second, expenditures for household consumption are going to adjust to a new reality in 2016, while in 2015 only a preclusive phase of the adjustment took place. Third, an accomplishment of adjustments to a ‘new normality’ is going to happen in foreign trade. The bulk of such adjustments have already happened, due to a floating exchange rate regime and the low level of oil prices. The described scenario for the demand components implies that the recession will continue in 2016: Real GDP is going to fall by 2.0%, after 3.9% in 2015.