Multinationals will need to prepare for another tough year for Belarus in 2016, as we forecast the economy to contract by at least two percent following a four percent YOY drop in GDP in 2015. The continued low oil prices and weak Russian economy are hurting government revenues, which in turn has a major effect on government spending, investment, real wages, and ultimately consumer spending as the economy relies heavily on state financing. Further currency depreciation in 2016 will keep inflation at elevated levels, ensuring high interest rates are maintained. Meanwhile, central bank reserves have fallen drastically in 2015 and Belarus has major debt payments – to the tune of US$ 3.3bn – due in 2016. Minsk is currently in talks with the IMF as well as with the Russian-led Eurasian Fund for Stabilization and Development (EFSD) to obtain external financing to help cover these payments.
In an insightful conversation with our Expert Advisor Andrew Wilson, an expert on Belarus and Eastern Europe and Professor of Slavonic and East European Studies at University College London, we discussed how the government plans to cope with these issues and much more. Clients can listen to this podcast via our client portal. If you’re not a client, you can head to FSG’s iTunes and download the podcast there.
Professor Wilson is a part of our Expert Advisor Network; FSG clients can reach out to their client relationship director to schedule a dedicated conversation with him.
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