The Belarusian government forecasts the nation's GDP growth at 2.1% year-on-year in 2019, 2.5% y/yin 2020, and 2.8% y/y in 2021, according to the cabinet's medium-term fiscal programme for 2019-2021 approved on March 6.
Belarus' GDP grew by 3% y/y in 2018, according to the national statistics agency Belstat. Belarus' GDP grew by 2.4% y/y in 2017 after two years of recession. It contracted 3.9% y/y in 2015 following 1.6% y/y growth in 2014.
Recently, the Belarusian government was forced to revise downward its forecast for the country’s GDP growth in 2019 (from 4.5% y/y to 2.1% y/y). According to Belarusian officials, the new forecast takes into account recent changes in the external economic environment, including changes in oil prices and the economic situations of the country's major trading partners, specifically Russia, and the values of their currencies.
Specifically, the target scenario was initially based on an oil price assumption of $70 per barrel, but the assumption was eventually reduced to $65 per barrel.
Minsk's forecast also takes into account the negative consequences of Russia’s so-called tax manoeuvre on Belarus. The tax manoeuvre shifts the tax burden from export duty on oil and petroleum products to mineral extraction tax (MET) on oil production. It envisages a gradual reduction in the rate of export duty on oil and petroleum products from 30% to zero in the period from 2019 to 2024 and a proportionate increase in MET.
According to the newly-approved programme, the key refinancing rate is projected at 10% at the end of 2019, 9.5% at the end of 2020 and 9% at the end of 2021. The average midterm consumer price index growth is projected at 5.3% in 2019, 5% in 2020, and 4.5% in 2021. The exchang
In February, the National Bank of Belarus (NBB) will keep its key refinancing rate unchanged at 10%. The regulator attributed its latest move to the fact that "the prevalence of factors allow hitting this year's inflation target without adjusting the monetary conditions". The move followed June's cut from 10.5% to 10%.