Belarus Country Risk Report Q4 2019
Belarus's economy is set for a slowdown over the next few years.
The economy is facing growing headwinds from lower global oil prices, the sharply deteriorating global macroeconomic outlook and Russia's recent oil-tax changes.
Against this backdrop, we at Fitch Solutions have revised-down our real GDP growth forecasts to just 2.1% in 2019 and 1.9% the following year, from previous forecasts of 2.9% and 2.4% respectively.
The August 6 agreement between Russia and Belarus to raise the oil transit tariff through the Druzhba pipeline will only temporarily thaw relations between the two countries.
With Belarus running out of options other than to accept Russia's attempts at a much closer vision of integration between the countries, the foreign policy backdrop facing the country will remain challenging in 2019 and 2020.
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.
Russia's oil tax 'manoeuvre' represents a persistent risk to investment.
- Executive Summary
- Core Views
- Key Risks
- Country Risk Summary
- Economic Risk Index
- Political Risk Index
- Economic – SWOT Analysis
- Political – SWOT Analysis
- Economic Outlook
- Economic Growth Outlook
- Growth Set To Slow Further In Belarus
- 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 & FINANCIAL ACCOUNT BALANCE
- TABLE: CURRENT ACCOUNT BALANCE FORECASTS
- TABLE: TOP FIVE IMPORTS IN 2018
- TABLE: TOP FIVE EXPORTS IN 2018
- 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 2028
- Long-Term Growth Prospects Remain Subdued
- TABLE: LONG-TERM MACROECONOMIC FORECASTS
- Belarus Country Risk Q4 2019THIS COMMENTARY IS PUBLISHED BY FITCH SOLUTIONS MACRO RESEARCH and is NOT a comment on Fitch Ratings’ Credit Rating. Any comments or data included in the report is solely derived from Fitch Solutions Macro Research and independent sources. Fitch Ratings’ analysts do not share data or information with Fitch Solutions Macro Research.ContentsPolitical Outlook
- Domestic Politics
- Belarus-Russian Tensions Unlikely To Abate After Tariff Agreement
- TABLE: POLITICAL OVERVIEW
- Long-Term Political Outlook
- Operational Risk
- TABLE: OPERATIONAL RISK
- Labour Costs
- TABLE: LABOUR REGULATIONS GOVERNING FLEXIBILITY OF WORKFORCE
- Legal Environment
- TABLE: BUREAUCRATIC PROCEDURES
- TABLE: BUREAUCRATIC BARRIERS
- Global Macro Outlook
- Potential Policy Missteps Pose The Largest Risk To Global Growth
- TABLE: GLOBAL MACROECONOMIC FORECASTS (2019-2024)
- TABLE: DEVELOPED MARKETS – REAL GDP GROWTH, % y-o-y
- TABLE: EMERGING MARKETS – REAL GDP GROWTH, % y-o-y
- Index Tables
- TABLE: BELARUS – MACROECONOMIC DATA AND FORECASTS