• Macrocenter - Macroeconomic Research Center
  • 15/01/2021

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

Full text of the article in Russian on Ekonomika.by

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