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.
Agriculture Products
grain, potatoes, vegetables, sugar beets, flax; beef, milk
Industries
metal-cutting machine tools, tractors, trucks, earthmovers, motorcycles, televisions, synthetic fibers, fertilizer, textiles, radios, refrigerators
Industrial Production Growth Rate
12% (2008 est.)country comparison to the world: 5
Labor Force
4.869 million (2007)country comparison to the world: 77
Electricity production
29.92 billion kWh (2007 est.)country comparison to the world: 63
Electricity Consumption
30.54 billion kWh (2007 est.)country comparison to the world: 58
Electricity Exports
5.062 billion kWh (2007 est.)
Electricity Imports
9.406 billion kWh (2007 est.)
Unemployment Rate
1.6% (2005)country comparison to the world: 12 note: officially registered unemployed; large number of underemployed workers
Population Below Poverty Line
27.1% (2003 est.)
Household Income or Consumption by Percentage Share
Lowest 10%: 3.6%
Highest 10%: 22% (2005)
Distribution of Family Income Gini Index
27.9 (2005)country comparison to the world: 122 21.7 (1998)
Budget
Revenues: $25.15 billion
Expenditures: $25.97 billion (2008 est.)
Central Bank Discount Rate
12% (31 December 2008)country comparison to the world: 37 10% (31 December 2007)
Commercial Bank Prime Lending Rate
Stock of Domestic Credit
$18.42 billion (31 December 2008)country comparison to the world: 60 $12.16 billion (31 December 2007)
Market Value of Publicly Traded Shares
$NA
Reserves of Foreign Exchange and Gold
$2.687 billion (31 December 2008 est.)country comparison to the world: 98 $3.952 billion (31 December 2007 est.)
Debt External
$15.15 billion (31 December 2008)country comparison to the world: 77 $12.49 billion (31 December 2007)
Stock of Direct Foreign Investment at Home
Stock of Direct Foreign Investment Abroad
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)
