Stagnation persists in the economy of Belarus. A small increase in GDP is due to domestic consumer demand. External demand (net exports) makes a negative contribution. Domestic investment demand does not affect the rate of economic growth.
Recently, a small increase in the economy of Belarus is supported by one component – an increase in final consumption expenditure. Real Belarusian GDP does not grow due to investments and net exports (fig. 1).
Fig. 1. Real GDP growth decomposition
Source: Macrocenter calculation according to Belstat
Since the crisis of 2011, the Belarusian economy has not showed high growth rates and continues to be either in a state of stagnation or recession (fig. 2.).
Fig. 2. Real GDP in Belarus
Remark. s.a. – seasonally adjusted using the TRAMO-SEATS model in the JDemetra
From the 3rd quarter of 2016, there is a declining trend in real net exports (fig. 3).
Fig. 3. Real net export
Source: Macrocenter calculation according to Belstat
The recession of 2014-2016 was mainly associated with the debt crisis in the economy of Belarus. In the last seven quarters, the level of gross capital formation remains almost unchanged (fig. 4).
Fig. 4. Real gross fixed capital formations and working capital
Source: Macrocenter calculation according to Belstat
Since the exit of the Belarusian economy from the state of recession, only one component has continued to show a steady increase – household final consumption expenditure (fig. 5).
Fig. 5. Real final consumption expenditure
Source: Macrocenter calculation according to Belstat
Thus, the currently low GDP growth rates in Belarus are achieved due to domestic consumer demand, while external demand makes a negative contribution, and domestic investment demand has little impact on economic growth.
Authors: Alex Akulich, Kate Baradauka
Source: macrocenter.by