Belarus Economy Profile 2008

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, GDP growth has been strong in recent years, reaching nearly 7% in 2007, despite the roadblocks of a tough, centrally directed economy with a high, but decreasing, rate of inflation. Belarus receives heavily 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, 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% will go to Russia in 2008, and 85% in 2009. Russia also increased Belarusian natural gas prices from $47 per thousand cubic meters (tcm) to $100 per tcm in 2007, 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 tightening of fiscal and monetary policies, 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.

GDP (purchasing power parity)

$104.7 billion (2007 est.)

GDP (official exchange rate)

$38.72 billion (2007 est.)

GDP - real growth rate

6.9% (2007 est.)

GDP - per capita (PPP)

$10,200 (2007 est.)

GDP - composition by sector

agriculture: 8.7%
industry: 40.6%
services: 50.6% (2007 est.)

Population below poverty line

27.1% (2003 est.)

Household income or consumption by percentage share

lowest 10%: 3.4%
highest 10%: 23.5% (2002)

Inflation rate (consumer prices)

8.3% (2007 est.)

Investment (gross fixed)

29.8% of GDP (2007 est.)

Labor force

4.3 million (31 December 2005)

Labor force - by occupation

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

Unemployment rate

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

Distribution of family income - Gini index

29.7 (2002)

Budget

revenues: $15.35 billion
expenditures: $16.78 billion (2007 est.)

Industries

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

Industrial production growth rate

5% (2007 est.)

Electricity - production

29.08 billion kWh (2005)

Electricity - consumption

29.49 billion kWh (2005)

Electricity - exports

5.053 billion kWh (2005)

Electricity - imports

9.091 billion kWh (2005)

Oil - production

33,700 bbl/day (2005 est.)

Oil - consumption

156,000 bbl/day (2005 est.)

Oil - imports

378,200 bbl/day (2004 est.)

Oil - exports

249,900 bbl/day (2004 est.)

Oil - proved reserves

198 million bbl (1 January 2006 est.)

Natural gas - production

165 million cu m (2005 est.)

Natural gas - consumption

19.47 billion cu m (2005 est.)

Natural gas - exports

0 cu m (2005 est.)

Natural gas - imports

19.31 billion cu m (2005)

Natural gas - proved reserves

2.716 billion cu m (1 January 2006 est.)

Current Account Balance

-$3.056 billion (2007 est.)

Agriculture - products

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

Exports

$22.91 billion f.o.b. (2007 est.)

Exports - commodities

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

Exports - partners

Russia 34.7%, Netherlands 17.7%, UK 7.5%, Ukraine 6.3%, Poland 5.2% (2006)

Imports

$27.05 billion f.o.b. (2007 est.)

Imports - commodities

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

Imports - partners

Russia 58.6%, Germany 7.5%, Ukraine 5.5% (2006)

Reserves of foreign exchange and gold

$1.474 billion (31 December 2007 est.)

Debt - external

$9.272 billion (30 June 2007)

Market value of publicly traded shares

$NA

Economic aid - recipient

$53.76 million (2005)

Currency (code)

Belarusian ruble (BYB/BYR)

Exchange rates

Belarusian rubles per US dollar - 2,145 (2007), 2,144.6 (2006), 2,150 (2005), 2,160.26 (2004), 2,051.27 (2003)

Fiscal year

calendar year