Исследовательский Центр ИПМ
Kasrtyčnicki Ekanamičny Forum

WP/12/03 Medium Term Perspectives for the Economy of Belarus after the Balance of Payments Crisis

The crisis of 2011 eliminated the imbalance that existed in the economy, but a large degree of uncertainty associated with the choice of the further economic policy still remains. The economy faces the task of achieving high growth rates without re-accumulation of imbalances, while retaining its existing structure. The aim of this paper is to assess the feasibility of this task. To do this, the paper analyzes both long-term and short-term factors of economic growth in Belarus, its internal and external obligations, and formulates possible scenarios for changes in the economic situation in the medium term.

The baseline scenario of tight monetary and fiscal policy leads to the preservation of external imbalances related to servicing the foreign debt. They may be overcome in the scenario of intensified market reforms, but their success may be impeded by the fundamental demographic and economic problems: the aging of the population against the declining population of working age, the growing migration and inequalities in the labor market. The implementation of the scenario of a short-term stimulation of the economy through macroeconomic policies will raise dramatically the likelihood of recurrence of the crisis, which will be deeper than the crisis in 2011, as it will happen in the face of increasing debt problems, leading to a widening gap in living standards in Belarus and neighboring countries.