Macroeconomic Dynamics of Belarus in 2014: Monetary shock during stagnation

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Weak long-term growth potential remains a priority concern of the Belarusian economy. One of the key elements of macroeconomic policy in 2014 remained exchange rate targeting regime. But this has increased the degree of conservatism of monetary and fiscal policy. Economic authorities for the first time sought to limit the growth of incomes. In addition, "repression" towards investment in favor of financial stability considerations was continued. However, such policy has failed in the front of new external shocks. As a result, the country experienced an exchange rate crisis, and tensions in the financial sector have increased. In this background, the results of macroeconomic dynamics in 2014 were far from satisfactory: low growth, high inflation and external deficit. Accumulated structural and conjunctural problems actualize threat of the lingering recession in the coming years.

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Last updated 26.10.2015
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