The European Bank for Reconstruction and Development (EBRD) has revised upward the forecast for Belarus' GDP growth to 1.5% in 2017 from its previous estimate of a 0.5% contraction in its May assessment. The Belarusian economy is returning to growth after two years of recession. The EBRD also improved next year’s forecast to 2% growth in 2018.

The bank highlighted the general better than expected growth in Belarus this year that has been driven by the spill over from Russia’s recovery.

However, on the downside Belarus belongs to a small group where credit growth has been contracting this year, while it expands modestly in all the other countries of the development bank’s operation.

In the first nine months of 2017, GDP grew by 1.7% year-on-year, driven by a recovery in external demand, the bank said in its report. Output in manufacturing, the economy’s largest sector, grew by 6.6% year-on-year.

Stabilisation of the exchange rate, weak domestic demand, moderation in wage growth as well as generally conservative macroeconomic policies have all helped to bring the inflation rate down to 4.9% year-on-year in September 2017, which is the lowest level in recent years.

The near-term economic outlook has improved due to resolution of the gas price dispute with Russia, agreement to restore crude oil supplies to Belarus to ordinary annual volumes, resumption of disbursements by the Eurasian Fund for Stabilisation and Development and successful placement by Belarus of sovereign Eurobonds for the principal amount of $1.4bn in June 2017. These developments have helped to mitigate short-term funding pressures.

In January-September 2017, Belarus' export of goods and services surged by 18.2% over the same period of 2016 to $26.025bn, the National Bank of the Republic of Belarus said. Trade is one of Belarus strengths and it is recovering in both directions -- east and west.