Home

Belarus vs. Ukraine

Economy

BelarusUkraine
Economy - overview

As part of the former Soviet Union, Belarus had a relatively well-developed industrial base, but it is now outdated, inefficient, and dependent on subsidized Russian energy and preferential access to Russian markets. The country’s agricultural base is largely dependent on government subsidies. Following the collapse of the Soviet Union, an initial burst of economic reforms included privatization of state enterprises, creation of private property rights, and the acceptance of private entrepreneurship, but by 1994 the reform effort dissipated. About 80% of industry remains in state hands, and foreign investment has virtually disappeared. Several businesses have been renationalized. State-owned entities account for 70-75% of GDP, and state banks make up 75% of the banking sector.

Economic output declined for several years following the break-up of the Soviet Union, but revived in the mid-2000s. Belarus has only small reserves of crude oil and imports crude oil and natural gas from Russia at subsidized, below market, prices. Belarus derives export revenue by refining Russian crude and selling it at market prices. Russia and Belarus have had serious disagreements over prices and quantities for Russian energy. Beginning in early 2016, Russia claimed Belarus began accumulating debt – reaching $740 million by April 2017 – for paying below the agreed price for Russian natural gas and Russia cut back its export of crude oil as a result of the debt. In April 2017, Belarus agreed to pay its gas debt and Russia restored the flow of crude.

New non-Russian foreign investment has been limited in recent years, largely because of an unfavorable financial climate. In 2011, a financial crisis lead to a nearly three-fold devaluation of the Belarusian ruble. The Belarusian economy has continued to struggle under the weight of high external debt servicing payments and a trade deficit. In mid-December 2014, the devaluation of the Russian ruble triggered a near 40% devaluation of the Belarusian ruble.

Belarus’s economy stagnated between 2012 and 2016, widening productivity and income gaps between Belarus and neighboring countries. Budget revenues dropped because of falling global prices on key Belarusian export commodities. Since 2015, the Belarusian government has tightened its macro-economic policies, allowed more flexibility to its exchange rate, taken some steps towards price liberalization, and reduced subsidized government lending to state-owned enterprises. Belarus returned to modest growth in 2017, largely driven by improvement of external conditions and Belarus issued sovereign debt for the first time since 2011, which provided the country with badly-needed liquidity, and issued $600 million worth of Eurobonds in February 2018, predominantly to US and British investors.

After Russia, the Ukrainian Republic was the most important economic component of the former Soviet Union, producing about four times the output of the next-ranking republic. Its fertile black soil accounted for more than one-fourth of Soviet agricultural output, and its farms provided substantial quantities of meat, milk, grain, and vegetables to other republics. Likewise, its diversified heavy industry supplied unique equipment such as large diameter pipes and vertical drilling apparatus, and raw materials to industrial and mining sites in other regions of the former USSR.

Shortly after independence in August 1991, the Ukrainian Government liberalized most prices and erected a legal framework for privatization, but widespread resistance to reform within the government and the legislature soon stalled reform efforts and led to some backtracking. Output by 1999 had fallen to less than 40% of the 1991 level. Outside institutions - particularly the IMF encouraged Ukraine to quicken the pace and scope of reforms to foster economic growth. Ukrainian Government officials eliminated most tax and customs privileges in a March 2005 budget law, bringing more economic activity out of Ukraine's large shadow economy. From 2000 until mid-2008, Ukraine's economy was buoyant despite political turmoil between the prime minister and president. The economy contracted nearly 15% in 2009, among the worst economic performances in the world. In April 2010, Ukraine negotiated a price discount on Russian gas imports in exchange for extending Russia's lease on its naval base in Crimea.

Ukraine’s oligarch-dominated economy grew slowly from 2010 to 2013, but remained behind peers in the region and among Europe’s poorest. After former President YANUKOVYCH fled the country during the Revolution of Dignity, Ukraine’s economy fell into crisis because of Russia’s annexation of Crimea, military conflict in the eastern part of the country, and a trade war with Russia, resulting in a 17% decline in GDP, inflation at nearly 60%, and dwindling foreign currency reserves. The international community began efforts to stabilize the Ukrainian economy, including a March 2014 IMF assistance package of $17.5 billion, of which Ukraine has received four disbursements, most recently in April 2017, bringing the total disbursed as of that date to approximately $8.4 billion. Ukraine has made significant progress on reforms designed to make the country prosperous, democratic, and transparent, including creation of a national anti-corruption agency, overhaul of the banking sector, establishment of a transparent VAT refund system, and increased transparency in government procurement. But more improvements are needed, including fighting corruption, developing capital markets, improving the business environment to attract foreign investment, privatizing state-owned enterprises, and land reform. The fifth tranche of the IMF program, valued at $1.9 billion, was delayed in mid-2017 due to lack of progress on outstanding reforms, including adjustment of gas tariffs to import parity levels and adoption of legislation establishing an independent anti-corruption court.

Russia’s occupation of Crimea in March 2014 and ongoing aggression in eastern Ukraine have hurt economic growth. With the loss of a major portion of Ukraine’s heavy industry in Donbas and ongoing violence, the economy contracted by 6.6% in 2014 and by 9.8% in 2015, but it returned to low growth in in 2016 and 2017, reaching 2.3% and 2.0%, respectively, as key reforms took hold. Ukraine also redirected trade activity towards the EU following the implementation of a bilateral Deep and Comprehensive Free Trade Agreement, displacing Russia as its largest trading partner. A prohibition on commercial trade with separatist-controlled territories in early 2017 has not impacted Ukraine’s key industrial sectors as much as expected, largely because of favorable external conditions. Ukraine returned to international debt markets in September 2017, issuing a $3 billion sovereign bond.

GDP (purchasing power parity)
$179.4 billion (2017 est.)
$175.1 billion (2016 est.)
$179.7 billion (2015 est.)

note: data are in 2017 dollars

$369.6 billion (2017 est.)
$360.5 billion (2016 est.)
$351.9 billion (2015 est.)

note: data are in 2017 dollars

GDP - real growth rate
2.4% (2017 est.)
-2.5% (2016 est.)
-3.8% (2015 est.)
2.5% (2017 est.)
2.4% (2016 est.)
-9.8% (2015 est.)
GDP - per capita (PPP)
$18,900 (2017 est.)
$18,400 (2016 est.)
$19,000 (2015 est.)

note: data are in 2017 dollars

$8,800 (2017 est.)
$8,500 (2016 est.)
$8,300 (2015 est.)

note: data are in 2017 dollars

GDP - composition by sector
agriculture: 8.1% (2017 est.)
industry: 40.8% (2017 est.)
services: 51.1% (2017 est.)
agriculture: 12.2% (2017 est.)
industry: 28.6% (2017 est.)
services: 60% (2017 est.)
Population below poverty line
5.7% (2016 est.)
3.8% (2016 est.)
Household income or consumption by percentage share
lowest 10%: 3.8%
highest 10%: 21.9% (2008)
lowest 10%: 4.2%
highest 10%: 21.6% (2015 est.)
Inflation rate (consumer prices)
6% (2017 est.)
11.8% (2016 est.)
14.4% (2017 est.)
13.9% (2016 est.)

note: Excluding the temporarily occupied territories of the Autonomous Republic of Crimea, the city of Sevastopol and part of the anti-terrorist operation zone

Labor force
4.381 million (2016 est.)
17.99 million (2017 est.)
Labor force - by occupation
agriculture: 9.7%
industry: 23.4%
services: 66.8% (2015 est.)
agriculture: 5.8%
industry: 26.5%
services: 67.8% (2014)
Unemployment rate
0.8% (2017 est.)
1% (2016 est.)

note: official registered unemployed; large number of underemployed workers

9.2% (2017 est.)
9.3% (2016 est.)

note: officially registered workers; large number of unregistered or underemployed workers

Distribution of family income - Gini index
26.5 (2011)
21.7 (1998)
25.5 (2015)
28.2 (2009)
Budget
revenues: 22.15 billion (2017 est.)
expenditures: 20.57 billion (2017 est.)
revenues: 29.82 billion (2017 est.)
expenditures: 31.55 billion (2017 est.)

note: this is the planned, consolidated budget

Industries
metal-cutting machine tools, tractors, trucks, earthmovers, motorcycles, synthetic fibers, fertilizer, textiles, refrigerators, washing machines and other household appliances
coal, electric power, ferrous and nonferrous metals, machinery and transport equipment, chemicals, food processing
Industrial production growth rate
5.6% (2017 est.)
3.1% (2017 est.)
Agriculture - products
grain, potatoes, vegetables, sugar beets, flax; beef, milk
grain, sugar beets, sunflower seeds, vegetables; beef, milk
Exports
$28.65 billion (2017 est.)
$22.98 billion (2016 est.)
$39.69 billion (2017 est.)
$33.56 billion (2016 est.)
Exports - commodities
machinery and equipment, mineral products, chemicals, metals, textiles, foodstuffs
ferrous and nonferrous metals, fuel and petroleum products, chemicals, machinery and transport equipment, foodstuffs
Exports - partners
Russia 43.9%, Ukraine 11.5%, UK 8.2% (2017)
Russia 9.2%, Poland 6.5%, Turkey 5.6%, India 5.5%, Italy 5.2%, China 4.6%, Germany 4.3% (2017)
Imports
$31.58 billion (2017 est.)
$25.61 billion (2016 est.)
$49.06 billion (2017 est.)
$40.5 billion (2016 est.)
Imports - commodities
mineral products, machinery and equipment, chemicals, foodstuffs, metals
energy, machinery and equipment, chemicals
Imports - partners
Russia 57.2%, China 8%, Germany 5.1% (2017)
Russia 14.5%, China 11.3%, Germany 11.2%, Poland 7%, Belarus 6.7%, US 5.1% (2017)
Debt - external
$39.92 billion (31 December 2017 est.)
$37.74 billion (31 December 2016 est.)
$130 billion (31 December 2017 est.)
$121.1 billion (31 December 2016 est.)
Exchange rates
Belarusian rubles (BYB/BYR) per US dollar -
1.9 (2017 est.)
2 (2016 est.)
2 (2015 est.)
15,926 (2014 est.)
10,224.1 (2013 est.)
hryvnia (UAH) per US dollar -
26.71 (2017 est.)
25.5513 (2016 est.)
25.5513 (2015 est.)
21.8447 (2014 est.)
11.8867 (2013 est.)
Fiscal year
calendar year
calendar year
Public debt
53.4% of GDP (2017 est.)
53.5% of GDP (2016 est.)
71% of GDP (2017 est.)
81.2% of GDP (2016 est.)

note: the total public debt of $64.5 billion consists of: domestic public debt ($23.8 billion); external public debt ($26.1 billion); and sovereign guarantees ($14.6 billion)

Reserves of foreign exchange and gold
$7.315 billion (31 December 2017 est.)
$4.927 billion (31 December 2016 est.)
$18.81 billion (31 December 2017 est.)
$15.54 billion (31 December 2016 est.)
Current Account Balance
-$931 million (2017 est.)
-$1.669 billion (2016 est.)
-$2.088 billion (2017 est.)
-$1.394 billion (2016 est.)
GDP (official exchange rate)
$54.44 billion (2017 est.)
$112.1 billion (2017 est.)
Stock of direct foreign investment - at home
$6.929 billion (31 December 2016 est.)
$7.241 billion (31 December 2015)
$67.22 billion (31 December 2017 est.)
$64.95 billion (31 December 2016 est.)
Stock of direct foreign investment - abroad
$3.547 billion (31 December 2016 est.)
$4.649 billion (31 December 2015)
$7.59 billion (31 December 2017 est.)
$7.983 billion (31 December 2016 est.)
Market value of publicly traded shares

NA

$20.71 billion (31 December 2012 est.)
$25.56 billion (31 December 2011 est.)
$39.46 billion (31 December 2010 est.)
Central bank discount rate
14% (19 April 2017)
15% (15 March 2017)
22% (23 December 2015)
7.5% (31 January 2012)
Commercial bank prime lending rate
9.66% (31 December 2017 est.)
14.4% (31 December 2016 est.)
16.38% (31 December 2017 est.)
19.24% (31 December 2016 est.)
Stock of domestic credit
$19.81 billion (31 December 2017 est.)
$20.65 billion (31 December 2016 est.)
$63.63 billion (31 December 2017 est.)
$61.65 billion (31 December 2016 est.)
Stock of narrow money
$3.702 billion (31 December 2017 est.)
$2.719 billion (31 December 2016 est.)
$21.92 billion (31 December 2017 est.)
$19.49 billion (31 December 2016 est.)
Stock of broad money
$3.702 billion (31 December 2017 est.)
$2.719 billion (31 December 2016 est.)
$21.92 billion (31 December 2017 est.)
$19.49 billion (31 December 2016 est.)
Taxes and other revenues
40.7% (of GDP) (2017 est.)
26.6% (of GDP) (2017 est.)
Budget surplus (+) or deficit (-)
2.9% (of GDP) (2017 est.)
-1.5% (of GDP) (2017 est.)
Unemployment, youth ages 15-24
total: 9.3%
male: 11.2%
female: 7.2% (2017 est.)
total: 23%
male: 24%
female: 21.5% (2016 est.)
GDP - composition, by end use
household consumption: 54.8% (2017 est.)
government consumption: 14.6% (2017 est.)
investment in fixed capital: 24.9% (2017 est.)
investment in inventories: 5.7% (2017 est.)
exports of goods and services: 67% (2017 est.)
imports of goods and services: -67% (2017 est.)
household consumption: 66.5% (2017 est.)
government consumption: 20.4% (2017 est.)
investment in fixed capital: 16% (2017 est.)
investment in inventories: 4.7% (2017 est.)
exports of goods and services: 47.9% (2017 est.)
imports of goods and services: -55.6% (2017 est.)
Gross national saving
24.5% of GDP (2017 est.)
23% of GDP (2016 est.)
25.8% of GDP (2015 est.)
18.9% of GDP (2017 est.)
20.2% of GDP (2016 est.)
17.7% of GDP (2015 est.)

Source: CIA Factbook