Macroeconomic forecast for Belarus, No. 1 (14), July 2017

The recovery will continue, yet slowly. Its pace will depend on the consistency of domestic macroeconomic policies, the implementation of agreements on the volume of imports of crude oil from Russia and the growth rate of the Russian economy.

We expect that the economic authorities will comply with the first condition and maintain a reasonable macroeconomic policy (and will maintain a real effective rate near the equilibrium level). Therefore, only the impact on the main macroeconomic indicators of a smaller volume of supplies of crude oil from Russia in 2018 and a slower growth in Russia in 2018 was modeled.

Belarus will return to growth under any scenario, mainly due to the restoration of exports and consumption of households. Growth rates are particularly sensitive to the supply of crude oil, while the slower growth in Russia, which undermines non-oil exports, has less effect due to the adaptation of non-oil imports.