WB upgrades 2021 outlook for Belarus’ GDP to minus 2.2%
<p> MINSK, Mar 31 - PrimePress. The World Bank has improves its for forecast for Belarus’ GDP dynamics in 2021 by 0.5pp to minus 2.2% year on year, the outlook for 2022 has been upgraded by 1pp to 1.9%. In the meantime, WB analysts now expect Belarus’ GDP to grow by 1.3% in 2023. These figures were released in latest edition of the WB Economic Update for the Europe and Central Asia Region. </p> <p> </p> <p> As previously reported, in its forecast of Jan 2021 the World Bank expected Belarus’ GDP to decrease by 2.7% year on year in 2021, and then recover by 0.9% in 2022. </p> <p> </p> <p> The WB outlook refers to the following factors as the key drivers of Belarus’ sustained recession in 2021 and weak recovery thereafter: ongoing political tensions, continued headwinds from the Russian “tax manoeuvre”, and lack of structural reforms. </p> <p> </p> <p> WB experts believe that recently announced tax increases – to contain the fiscal deficit and that of the pension system – will hurt an already struggling private sector, hit by the absence of support during the COVID-19 shock. Elevated market interest rates and falling investor confidence will dampen domestic and foreign investment. </p> <p> </p> <p> “A GDP contraction of 2.2 percent is projected in 2021. With weak domestic demand expected to persist, the recovery is expected to be modest in the medium term; however, slow growth will also help to compress imports and the current account deficit.” The World Bank expects Belarus’ exports to grow by 2.1% in 2021, with imports contracting by 1.1%. </p> <p> </p> <p> The WB expects inflation in Belarus to reach 8.2% in 2021, 6.1% in 2022 and 5.7% in 2023. “Recently introduced price controls are unlikely to contain inflation but in certain circumstances might cause shortages of some goods.” </p> <p> </p> <p> WB experts believe that in 2021, the government will be able to control problems with external debt refinancing by means of refinancing from Russia and thanks to the availability of reserves. </p> <p> </p> <p> According to the National Bank of Belarus, foreign exchange reserves of $7.47 billion on January 1, 2021 covered 17.7% of gross external debt against 23.1% on January 1, 2020. In 2022-2023, the debt problem will be aggravated by upcoming repayments of Eurobonds, as well as the beginning of payments on the Russian loan for the construction of the Belarusian nuclear power plant. </p> <p> </p> <p> The World Bank predicts that the level of public debt in Belarus in 2021 will amount to 44.1% of GDP, in 2022 - 44%, and in 2023 - 45.4%. </p> <p> </p> <p> According to the forecast of the World Bank, in 2021, the recovery of Ukraine's GDP will amount to 3.8%, Kyrgyzstan - 3.8%, Armenia - 3.4%, Poland - 3.3%, Kazakhstan - 3.2% and Russia - 2.9%. End </p>
2021-04-01
Primepress
WB upgrades 2021 outlook for Belarus’ GDP to minus 2.2%
MINSK, Mar 31 - PrimePress. The World Bank has improves its for forecast for Belarus’ GDP dynamics in 2021 by 0.5pp to minus 2.2% year on year, the outlook for 2022 has been upgraded by 1pp to 1.9%. In the meantime, WB analysts now expect Belarus’ GDP to grow by 1.3% in 2023. These figures were released in latest edition of the WB Economic Update for the Europe and Central Asia Region.
As previously reported, in its forecast of Jan 2021 the World Bank expected Belarus’ GDP to decrease by 2.7% year on year in 2021, and then recover by 0.9% in 2022.
The WB outlook refers to the following factors as the key drivers of Belarus’ sustained recession in 2021 and weak recovery thereafter: ongoing political tensions, continued headwinds from the Russian “tax manoeuvre”, and lack of structural reforms.
WB experts believe that recently announced tax increases – to contain the fiscal deficit and that of the pension system – will hurt an already struggling private sector, hit by the absence of support during the COVID-19 shock. Elevated market interest rates and falling investor confidence will dampen domestic and foreign investment.
“A GDP contraction of 2.2 percent is projected in 2021. With weak domestic demand expected to persist, the recovery is expected to be modest in the medium term; however, slow growth will also help to compress imports and the current account deficit.” The World Bank expects Belarus’ exports to grow by 2.1% in 2021, with imports contracting by 1.1%.
The WB expects inflation in Belarus to reach 8.2% in 2021, 6.1% in 2022 and 5.7% in 2023. “Recently introduced price controls are unlikely to contain inflation but in certain circumstances might cause shortages of some goods.”
WB experts believe that in 2021, the government will be able to control problems with external debt refinancing by means of refinancing from Russia and thanks to the availability of reserves.
According to the National Bank of Belarus, foreign exchange reserves of $7.47 billion on January 1, 2021 covered 17.7% of gross external debt against 23.1% on January 1, 2020. In 2022-2023, the debt problem will be aggravated by upcoming repayments of Eurobonds, as well as the beginning of payments on the Russian loan for the construction of the Belarusian nuclear power plant.
The World Bank predicts that the level of public debt in Belarus in 2021 will amount to 44.1% of GDP, in 2022 - 44%, and in 2023 - 45.4%.
According to the forecast of the World Bank, in 2021, the recovery of Ukraine's GDP will amount to 3.8%, Kyrgyzstan - 3.8%, Armenia - 3.4%, Poland - 3.3%, Kazakhstan - 3.2% and Russia - 2.9%. End