EDB confirms 2.5% GDP growth forecast for Belarus in 2021

<p> MINSK, Oct 18 - PrimePress. The Eurasian Development Bank (EDB) has confirmed its forecast, which says that Belarus’ gross domestic product (GDP) will expand by 2.5% year on year in 2021, in accordance with the baseline scenario. This is stated in the EDB’s October Macroeconomic Review published on 18 October. </p> <p>   </p> <p> As previously reported, in its regular Macroeconomic Review published on 20 September, the Eurasian Development Bank upgraded its forecast for the growth of Belarus’ GDP in 2021 by 1.2 percentage points year on year up to 2.5%. The EDB says this is due to the “stronger than expected performance of the services sector in June-July, amid a likely adaptation of the population to the pandemic environment, as well as an increase in government funding to the economy not attributable to budget expenditures”. </p> <p>   </p> <p> The EDB analysts say the economic sentiment of Belarusian industrial enterprises has improved in September 2021. </p> <p>   </p> <p> "The economic sentiment index in the industry, calculated by the National Bank, increased by 1.9 p.p. to 5.3%.” </p> <p>   </p> <p> According to EDB analysts, the positive economic sentiment and actual economic growth was primarily stimulated by a favourable external environment. “Rising free market prices support exports of Belarusian goods. In August, the value volume of foreign deliveries increased by 34% year on year, and by 36.2% year on year in the first eight months of the year. The supportive factor in recent months has been the increase in free market commodity prices this year. Their positive impact on Belarusian exports is likely to persist until the end of this year and may weaken during 2022,” says the review. </p> <p>   </p> <p> However, the EDB notes that a decline in the growth dynamics of a of physical volumes of exports - to 0.9% and 3.9% year-on-year in July and August respectively, after 19.8% year-on-year in the second quarter of 2021. This is attributed to the end of the active phase of external demand recovery and exhaustion of the low base effect, "which was formed in the first half of 2020 under the impact of the first wave of pandemic and temporary reduction of Belarusian oil products and potash fertilizer exports.” </p> <p>   </p> <p> According to EDB experts, the Western sanctions have not yet had a significant impact on Belarusian exports, “however, their effects may become more evident by the end of the year due to the deferred nature of the restrictions imposed”. </p> <p>   </p> <p> The EDB review also notes that inflation in Belarus in September 2021 exceeded 10% for the first time since December 2016: the growth rate of the consumer price index amounted to 10.2% year-on-year after 9.8% year-on-year in August. </p> <p>   </p> <p> “Inflation dynamics signal the likely realisation of the risk we identified in the previous survey associated with a lower grain harvest. For example, food prices rose by 11.2% year-on-year in September following a 9.5% year-on-year increase the month before. The rise in domestic food prices is probably also reflected in higher global food prices and the key trading partner, Russia. The rise in non-food prices slowed to 10.3% year-on-year in September from 11.4% year-on-year in August, but remained strong. Inflation in the non-food segment was supported by higher inflation expectations, global supply delays and higher global metal and building materials prices. Inflationary factors will remain in place for the remainder of the year. As a result, inflation in Belarus will remain near current levels until November and may slow down in December," says the survey. </p> <p>   </p> <p> The government of Belarus approved a medium-term financial program of the national budget for 2021-2023 under Resolution #227 of April 20, 2012, according to which the Belarusian GDP growth is planned at the level of 1.8% in 2021, 2.9% in 2022 and 3.8% in 2023. </p> <p>   </p> <p> The Eurasian Development Bank (EDB) is an international financial institution promoting integration and development in its member countries. For 15 years, the bank has worked to strengthen and broaden economic ties and foster comprehensive development in its member countries – Armenia, Belarus, Kazakhstan, the Kyrgyz Republic, Russia, and Tajikistan. The EDB’s charter capital totals US $7 billion. End </p>

2021-10-19

Primepress