The International Monetary Fund (IMF) has revised downward its forecasts for the economic growth in Belarus in 2019 from 3.1% year-on-year to 1.8% y/y, according to the multinational lender's World Economic Outlook published on April 9.
Last week, the World Bank has revised the nation's GDP growth from 2.7% y/y to 2.2% y/y in 2019, from 2.5% y/y to 2.4% y/y in 2020 as well as from 2.5% y/y to 2.1% y/y in 2021. The World Bank said that the country's economic growth will depend on the results of Minsk's talks with Russia on compensation for the latter’s so-called tax manoeuvre in the oil sector.
The Belarusian economy grew by 0.8% y/y in January-February following 0.7% y/y growth in January, according to national statistics agency Belstat. Belarus' GDP grew by 3% y/y in 2018 after a 2.4% y/y expansion in 2017 after two years of recession. It contracted 3.9% y/y in 2015 following 1.6% y/y of growth in 2014.
In January, the IMF said that Belarus faces a new economic crisis if Minsk fails to secure full compensation from Russia and told Minsk it had better prepare a “plan B” in case there was no money forthcoming.
According to the IMF, medium-term growth in Belarus is projected at 2%, limiting convergence towards the income levels of richer neighbouring countries, according to the multinational lender. However, this modest outlook is "conditional" on full compensation from Russia.
"Should compensation be significantly less than full - and this is the key risk hovering over the Belarusian economy at this stage - medium-term growth could be materially lower than 2%, and the budget and current account deficits higher than projected above," the IMF said in its statement.
Russia’s tax manoeuvre in the oil industry envisages a gradual reduction in the rate of export duty on oil and petroleum products from 30% to zero in the period from 2019 to 2024 and a proportionate increase in mineral extraction tax on oil production.