In January-April 2020 Belarus industrial output declined 3.8% year-on-year as the double whammy of the oil price collapse and the coronavirus stop-shock hit home.
Belarus was more affected by the fall in the oil prices as Belarus president Alexander Lukashenko has refused to take the pandemic seriously and Minsk is one of the few cities in the region that was not put on lockdown. The football league is still running and on May 9 the country held a few military parade to celebrate VE day.
A lot of the pain felt by the Belarusian economy has been transmitted from Russia, which remains the country’s major economic partner.
The most significant output loss in year-on-year terms occurred in oil refining (-32.3%), chemicals (-15.9%) and dump trucks/tractors (-14.5%) producing sectors.
At the same time positive growth in pharmaceuticals (11.2%), wooden products (10.8%), cars and trucks (8%) and food industry (4%) provided some support for the economy.
The construction sector was up 6.3%, and agriculture and retail trade increased by 5% and 4.7% respectively too.
Meanwhile, in order to support local producers, the National Bank of Belarus adopted easing policy bias cutting key interest rate by 0.75 pp to 8% effective as of 20 May.
“This notwithstanding we expect the negative trends in the economy to intensify in Q2 owing to the COVID-19 impact,” said Olga Zhegulo, an analyst with Raiffeisen Bank (RZB).