Belarus Economy Profile 2009

Economy - overview

Belarus has seen little structural reform since 1995, when President LUKASHENKO launched the country on the path of "market socialism." In keeping with this policy, LUKASHENKO reimposed administrative controls over prices and currency exchange rates and expanded the state's right to intervene in the management of private enterprises. Since 2005, the government has re-nationalized a number of private companies. In addition, businesses have been subject to pressure by central and local governments, e.g., arbitrary changes in regulations, numerous rigorous inspections, retroactive application of new business regulations, and arrests of "disruptive" businessmen and factory owners. A wide range of redistributive policies has helped those at the bottom of the ladder; the Gini coefficient is among the lowest in the world. Because of these restrictive economic policies, Belarus has had trouble attracting foreign investment. Nevertheless, government statistics indicate GDP growth has been strong in recent years, reaching 10% in 2008, despite the roadblocks of a tough, centrally directed economy with a high rate of inflation. Belarus receives discounted oil and natural gas from Russia and much of Belarus' growth can be attributed to the re-export of Russian oil at market prices. Trade with Russia - by far its largest single trade partner - decreased in 2007-08, largely as a result of a change in the way the Value Added Tax (VAT) on trade was collected. Russia has introduced an export duty on oil shipped to Belarus, which will increase gradually through 2009, and a requirement that Belarusian duties on re-exported Russian oil be shared with Russia - 80% was slated to go to Russia in 2008, and 85% in 2009. Russia also increased Belarusian natural gas prices from $47 per thousand cubic meters (tcm)in 2006 to $100 per tcm in 2007, and to $128 per tcm in 2008, and plans to increase prices gradually to world levels by 2011. Russia's recent policy of bringing energy prices for Belarus to world market levels may result in a slowdown in economic growth in Belarus over the next few years. Some policy measures, including improving energy efficiency and diversifying exports, have been introduced, but external borrowing has been the main mechanism used to manage the growing pressures on the economy. Belarus felt the effects of the global financial crisis in late 2008 and reached agreement with Russia in November for a $2 billion stabilization loan and with the IMF for a $2.5 billion stand-by agreement in January 2009. In line with IMF conditionality, Belarus devalued the ruble approximately 20% in January 2009 and has tightened some fiscal and monetary policies. Belarus's economic growth is likely to slow in 2009 as it faces decreasing demand for its exports, and will find it difficult to increase external borrowing if the credit markets continue to tighten.

GDP (purchasing power parity)

$114.1 billion (2008 est.)
$103.7 billion (2007 est.)
$95.83 billion (2006 est.)
note: data are in 2008 US dollars

GDP (official exchange rate)

$60.29 billion (2008 est.)

GDP - real growth rate

10% (2008 est.)
8.2% (2007 est.)
9.9% (2006 est.)

GDP - per capita (PPP)

$11,800 (2008 est.)
$10,700 (2007 est.)
$9,800 (2006 est.)
note: data are in 2008 US dollars

GDP - composition by sector

agriculture: 8.5%
industry: 41.2%
services: 50.3% (2008 est.)

Population below poverty line

27.1% (2003 est.)

Labor force

4.869 million (2007)

Labor force - by occupation

agriculture: 14%
industry: 34.7%
services: 51.3% (2003 est.)

Unemployment rate

1.6% (2005)
note: officially registered unemployed; large number of underemployed workers

Household income or consumption by percentage share

lowest 10%: 3.6%
highest 10%: 22% (2005)

Distribution of family income - Gini index

27.9 (2005)
21.7 (1998)

Investment (gross fixed)

31.9% of GDP (2008 est.)

Budget

revenues: $25.15 billion
expenditures: $25.97 billion (2008 est.)

Inflation rate (consumer prices)

14.8% (2008 est.)
8.4% (2007 est.)

Central bank discount rate

12% (31 December 2008)
10% (31 December 2007)

Commercial bank prime lending rate

NA% (31 December 2008)
8.58% (31 December 2007)

Stock of money

$4.872 billion (31 December 2008)
$4.065 billion (31 December 2007)

Stock of quasi money

$8.784 billion (31 December 2008)
$6.823 billion (31 December 2007)

Stock of domestic credit

$18.42 billion (31 December 2008)
$12.16 billion (31 December 2007)

Industries

metal-cutting machine tools, tractors, trucks, earthmovers, motorcycles, televisions, synthetic fibers, fertilizer, textiles, radios, refrigerators

Industrial production growth rate

12% (2008 est.)

Electricity - production

29.91 billion kWh (2006 est.)

Electricity - production by source

fossil fuel: 99.5%
hydro: 0.1%
nuclear: 0%
other: 0.4% (2001)

Electricity - consumption

30.43 billion kWh (2006 est.)

Electricity - exports

5.789 billion kWh (2006 est.)

Electricity - imports

10.15 billion kWh (2006 est.)

Oil - production

33,700 bbl/day (2007 est.)

Oil - consumption

179,700 bbl/day (2006 est.)

Oil - imports

394,100 bbl/day (2005 est.)

Oil - exports

256,400 bbl/day (2005 est.)

Oil - proved reserves

198 million bbl (1 January 2008 est.)

Natural gas - production

164 million cu m (2007 est.)

Natural gas - consumption

21.76 billion cu m (2007 est.)

Natural gas - exports

0 cu m (2007 est.)

Natural gas - imports

21.6 billion cu m (2007 est.)

Natural gas - proved reserves

2.832 billion cu m (1 January 2008 est.)

Current Account Balance

$-5.063 billion (2008 est.)
$-3.042 billion (2007 est.)

Agriculture - products

grain, potatoes, vegetables, sugar beets, flax; beef, milk

Exports

$33.04 billion (2008 est.)
$24.33 billion (2007 est.)

Exports - commodities

machinery and equipment, mineral products, chemicals, metals, textiles, foodstuffs

Exports - partners

Russia 32.2%, Netherlands 16.9%, Ukraine 8.5%, Latvia 6.6%, Poland 5.5%, UK 4.4% (2008)

Imports

$39.16 billion (2008 est.)
$28.4 billion (2007 est.)

Imports - commodities

mineral products, machinery and equipment, chemicals, foodstuffs, metals

Imports - partners

Russia 59.8%, Germany 7.1%, Ukraine 5.4% (2008)

Reserves of foreign exchange and gold

$2.687 billion (31 December 2008 est.)
$3.952 billion (31 December 2007 est.)

Debt - external

$15.15 billion (31 December 2008)
$12.49 billion (31 December 2007)

Market value of publicly traded shares

$NA

Economic aid - recipient

$53.76 million (2005)

Currency (code)

BYB/BYR

Currency (code)

Belarusian ruble (BYB/BYR)

Exchange rates

Belarusian rubles (BYB/BYR) per US dollar - 2,130 (2008 est.), 2,145 (2007), 2,144.6 (2006), 2,150 (2005), 2,160.26 (2004)

Fiscal year

calendar year