The Belarusian economy is doing a lot better this year than anyone thought it would do at the start of this year - largely thanks to Russia’s economic recovery.
The IMF revised its forecast for Belarus' GDP this year upwards to a 0.7% year-on-year growth vs the earlier expectation of a contraction of 0.8% y/y (April's forecast of the Fund), according to the multinational lender's World Economic Outlook published on October 13.
According to official data, the GDP of Belarus increased by 1.6% y/y in January-August. Belarus' GDP contracted 3.9% y/y in 2015 after 1.6% y/y growth in 2014. Belarus has been badly hit by the crisis from sanctions and low oil prices affecting its traditional market of Russia.
Trade with Russia is driving the growth. Oil trade, halted by a row earlier this year, has been resumed.
The exports of the Belarusian mechanical engineering products to Russia have jumped more than 50% in January-September, Alexander Ogorodnikov, Belarusian Deputy Industry Minister, told journalists on October 13. Ogorodnikov added that in January-September, the exports of Belarusian mechanical engineering grew by 25%, without given more details of the absolute terms of the exports.
The foreign exchange reserves of Belarus are also in good shape, up by $273mn or 3.9% month-on-month to $7.267bn in September, following a 4.9% m/m growth in August and a 25.2% m/m jump in June, the National Bank of Belarus (NBB) said in a statement on October 6.
And maybe most importantly, the growth in FDI within the Eurasia Economic Union (EEU) has begun to take off including within the wider Commonwealth of Independent States (CIS) plus Georgia area, but at a much faster pace; total mutual FDI stock within the wider region was up by a more modest 7.9% to $45.1bn.
Russia remains responsible for the lion’s share of outward FDI investment; indeed it is the only EEU member that is a net exporter of FDI to other countries in the bloc.
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