Belarus’ economy will continue to contract in 2017 before returning to 1.1% growth in 2018, the World Bank's economist for the republic said on December 12, reports  BelTA.

World Bank country economist Kirill Gaiduk said: “If we consider medium-term prospects, we expect a recovery of the Belarusian economy in 2018 at the earliest.” Gaiduk said during the presentation of another World Bank Country Survey for Belarus.

Lower export revenues and weak domestic demand are continuing to have negative effects on the economy in 2016 and holding back a recovery. However, the economy is approaching bottom now, said Gaiduk, pointing to the moderate reduction of industrial output and the small growth in agriculture as well as a number of branches of the services sector.

The World Bank says that the Belarusian economy is expected to recover on the back of an improved external environment and the first results form domestic reforms being put in place by the state – including a new state spending programme that comes with tougher requirements for eligibility for access to soft state loans that may bolster the national competitive ability.

However, the bank said Belarus is still exposed to external shocks and a growing current account deficit, as well as the external state debt denominated in foreign currencies. In the meantime, GDP continues to fall but at a slower rate.

“The restored export of investment goods and the export of machines to Russia have helped slow down reduction in the production sector,” Gaiduk said. Belarus' GDP is expected to continue falling in 2017, but growth of up to 1.1% can be expected in 2018.

“Economic reforms should stay focused on improving the competitive ability and the manufacturing ability of enterprises. It is the key precondition for the sustainable growth of the national economy. In order to encourage the establishment of new enterprises, it is necessary to further improve business operation terms although certain progress has been secured in this field in the last few years — Belarus is ranked 37th out of 190 economies in the latest World Bank Doing Business report,” concluded Gaiduk.