Belarus has been the last horse out of the gate in the economic recovery stakes but the recovery is underway now.
Belarus' GDP growth of 1% in the first half 2017 is a good result, as many were expecting no growth at all this year. The 2018 forecast is for 3.4% growth and for the next five years.
And the countries finances are in a lot better shape after Minsk issued a $1.4bn Eurobond in June. Together with the last but one tranche from Russia of $700bn (issued in rubles), Minsk has the money in place to cover the $3.7bn in obligations due this year and well into 2018. The government says that it has no plans to borrow any more in the short-term and hopes to put the balance payments back on an even keel so that it can finance future obligations out of revenues.
The government is also making progress on its other big battle – to bring inflation down to sensible levels. Inflation is on course to reduce to 6% this year, down from double-digit levels in recent years.
However, the inflation targeting as president Alexander Lukashenko is insisting wages be hiked to BYN1,500 from about BYN1,000 now but without providing a plan for the necessary productivity gains. All that will do is push up inflation. This is a strategy the government has followed many times in the past and brings no economic advantage.
On the political front, relations with Russia have warmed again after a nasty oil and gas row earlier this year and Lukashenko has been brought to heel after flirting with the west.
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Belarus’s economy is doing a lot better than expected, with the government forecasting GDP growth may hit 1.7% this year, against expectations of no growth at all at the start of the year.