Исследовательский Центр ИПМ
Kasrtyčnicki Ekanamičny Forum

Macroeconomic Update: Sources of economic growth, 2017Q3, №2(15), December 2017

The recovery is on the way: in 2017Q3, real GDP went up by 2.8% yoy, in Oct-Nov 2017 – by 4.6% yoy (own estimates based on Belstat data). It looks like economic growth in 2017 will overpass the most optimistic forecasts made in 2017.

Drivers of growth in 2017Q3 changed from non-oil exports to domestic demand and oil exports. As a result, imports growth accelerated, and net exports contribution to real GDP growth turned negative for the first time since 2013.

Factors that drove non-oil exports growth have almost gone: further real depreciation of Belarusian rouble is hardly possible due to limited disinflation potential, while Russian growth is too weak and volatile to be strong driver of Belarusian exports.

The authorities should not try to ‘support’ growth by softer macroeconomic policies if next year it will be weaker than expected: as non-oil imports is very sensitive to domestic demand dynamics, and any artificial boost of consumption or investment may soon lead to a currency crisis.