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Belarus Country Risk Report Q4 2018

Belarus Country Risk Report Q4 2018

Key View:

Economic growth in Belarus will peak in 2018, supported by robust fixed investment and the ongoing recovery across key trading partners. Beyond this, economic activity will gradually slow as it is capped by an over-reliance on Russia.

Fixed investment in Belarus in the months ahead will continue to pick up, largely in line with rising energy prices.

The ongoing recovery in Russia will continue to provide a boost to Belarus's economy over the coming quarters, as a result of the latter's economic dependence on the former.

Belarus's reliance on the Russian economy is a double-edged sword, as an expected growth slowdown in Russia in 2019 will weigh on Belarus's outlook.

The latest government cabinet reshuffle carried out by Belarusian President Alexander Lukashenko in August 2018 will lead to some minor economic reforms and liberalisation, although these will only proceed slowly. Improving relations with the West will continue to be hindered by Russia's assertiveness in keeping Belarus within its sphere of influence.

Key Risks

Belarus will make scant progress in reducing the size of the country's external debt pile in the years ahead. As a result, Belarus will need to secure external financ-ing to meet foreign currency debt obligations, which will expose the country to significant financing risks.

Failure to secure external financing could trigger a vicious cycle of increased default risk and slowing growth.

Belarus will remain dependent on continued good relations with Russia and high yield eurobond issuance, the latter being sensitive to global demand conditions.

The risk of a traded-conflict emerging between Russia and Belarus – although not our core view at present – has risen in recent weeks, posing a downside risk to our growth forecasts over the coming years.


Executive Summary
Core Views
Key Risks
Country Risk Summary
Economic Risk Index
Political Risk Index
SWOT
Economic – SWOT Analysis
Political – SWOT Analysis
Economic Outlook
Economic Growth Outlook
Growth In Belarus To Peak In 2018
GDP By Expenditure Outlook
TABLE: GDP GROWTH FORECASTS
TABLE: PRIVATE CONSUMPTION FORECASTS
TABLE: GOVERNMENT CONSUMPTION FORECASTS
TABLE: FIXED INVESTMENT FORECASTS
TABLE: NET EXPORTS FORECASTS
Outlook On External Position
TABLE: CAPITAL AND FINANCIAL ACCOUNT BALANCE
TABLE: CURRENT ACCOUNT BALANCE FORECASTS
TABLE: TOP FIVE IMPORTS IN 2017
TABLE: TOP FIVE EXPORTS IN 2017
Monetary Policy Framework
TABLE: MONETARY POLICY FORECASTS
Structural Fiscal Position
TABLE: FISCAL AND PUBLIC DEBT FORECASTS
TABLE: MAIN REVENUE AND EXPENDITURE CATEGORIES
10-Year Forecast
The Belarusian Economy To 2027
Long-Term Growth Prospects Remain Subdued
TABLE: LONG-TERM MACROECONOMIC FORECASTS
Belarus Country Risk Q4 2018ContentsPolitical Outlook
Domestic Politics
Cabinet Reshuffle In Belarus No Harbinger Of Significant Reform
TABLE: POLITICAL OVERVIEW
Long-Term Political Outlook
Lukashenko And Russia To Determine State Evolution
Global Macro Outlook
Strong Growth, But Greater Headwinds Too
TABLE: GLOBAL MACROECONOMIC FORECASTS
TABLE: DEVELOPED STATES, REAL GDP GROWTH, % y-o-y
TABLE: EMERGING MARKETS, REAL GDP GROWTH, % y-o-y
Index Tables
TABLE: BELARUS – MACROECONOMIC DATA & FORECASTS

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