Macroeconomic Trends in 2010: Growth at any cost

The year 2010 saw Belarus gradually being pulled out of cyclical recession owing to the revival of external markets and massive incentives provided by economic leaders. However, the administration set itself a priority task of reaching ambitious GDP and income growth targets while largely ignoring economic requirements for sustainable and fast-paced long-term economic development. Moreover, the investment expansion scenario formulated by the government, which envisaged measures to restrain the accumulation of structural disproportions, de facto was not implemented, as some of its prerequisites proved unfeasible. The outcome was two-fold: on one hand, the campaign to reach quantitative indicator targets resulted in quite impressive GDP and income growth figures; on the other hand, new disproportions in the economy were created, and those already in existence were enhanced. The problems of the foreign account deficit, external debt, money market imbalances, inflationary potential and the fragile financial standing of domestic companies had therefore increased exponentially by early 2011. These problems, as a result, put a question mark over both current macroeconomic stability and long-term sustainable growth.