Opinions & Interviews

MINSK, 19 April (BelTA) – Moderation restoration of the Belarusian economy will continue in the medium term but will not exceed 3%, BelTA learned from Marina Sidorenko, a World Bank economist, during the presentation of another World Bank Economic Update on Belarus on 19 April.

According to the source, in early 2018 the speed of recovery of the Belarusian economy accelerated, yet it is necessary to reinforce the foundation for economic growth.

Moderate restoration of the economy will continue on the back of improved domestic and foreign demand. However, the annual economic growth will not exceed 3% due to limitations of the production sector. Belarus’ GDP growth is expected to hit 2.9% in 2018, 2.7% in 2019, and 2.5% in 2020. The figures have been revised upwards in comparison with the previous economic update on Belarus.

The World Bank believes that prospects of economic growth in Belarus in the medium term are complicated due to the need for external finance and unresolved domestic structural problems.

According to the World Bank, the medium-term forecast is susceptible to serious risks relating to changes of the external environment. Worsening or unstable economic situation in Russia, including due to the recently introduced sanctions against some Russian companies, may have an effect on the Belarusian economy. The influence has already been manifested in changes of the Belarusian ruble’s exchange rate against the U.S. dollar and the Russian ruble, explained Marina Sidorenko. “The exchange rates are getting stabilized now,” she noted.

The World Bank believes Belarus should more effectively distribute capital and gradually reduce the debt burden in order to reach a more stable growth trajectory. Belarus has been accumulating wealth in the form of material and human capital for the last few decades. However, the material capital grew higher at the expense of the country’s worsening position in relation to net foreign assets.

Belarus has been a World Bank member since 1992. Since then the World Bank has lent $1.7 billion to Belarus. At present the World Bank’s investment portfolio in the country includes eight projects worth $790 million.