REPUBLIC OFBELARUS

OUTLINE:

BackgroundEconomic development since

1991Preconditions and impact of

world financial crisis in 2008Devaluation of currency in 2009Conclusion

BACKGROUND Total area 207,600 sq km Population 9,648,533 (2009) GDP-real growth rate 8.1%

(2008) GDP per capita $12,000

(2008) Labor force 4.3 million

(2005) Official unemployment rate

1.6% (2005) Inflation rate (consumer

prices) 15.5 % (2008) CA balance -$3.832 billion

(2008)

SINCE INDEPENDENCE 1991:

Steady Growth Has Driven Poverty Reduction (GDP growth index and poverty headcount rates)

38.6 32.1 33

46.7 41.9

28.9 30.5 27.1

159.2 149.3

142.2 135.8

128.4 124.1 114.5

102.8

177.3

17.8

0

10.

20

30

40

50

60.

1996 1997 1998 1999 2000 2001 2002 2003 2004

GDP growth Index, 1995=100

Poverty headcount ratio, %

220

180

140

100

60

20

GDP growth

Poverty headcount ratio

Source: Country Economic Memorandum for the Republic of Belarus, World Bank

AVERAGE ANNUAL GDP GROWTH, %

-4

-2

0

2

4

6

8

10

1996-2000 2001-2004

CEEBS

Lithuania

Poland

CIS

Russia

Ukraine

Belarus

Source: World Bank ECA Regional Database

AVERAGE ANNUAL INFLATION, %

Source: World Bank ECA Regional Database

0

10

20

30

40

50

60

70

80

1996-2000 2001-2004

CEEBS Lithuania

Poland CIS

Russia Ukraine

Belarus

STRUCTURE OF EXPORT OF PRODUCTION FROM THE REPUBLIC OF BELARUS IN 2007, IN COST EXPRESSION

Source: IRUE "National center of marketing and price study"

GLOBAL FINANCIAL CRISIS, 2008PRECONDITIONS:

High degree of government interventions

Underdeveloped stock marketHigh dependence on trade with

RussiaSlow pace of geographic export

diversification

GLOBAL FINANCIAL CRISISIMPACT:

State dominated economy, limited contact with world financial markets, less dependent on international credit

not severe effect of financial crisis

Sharp decline in Russian economic subsidies and sharp decline in exports and imports to Russia due to financial crisis

affected Belarusian economy

IMPORTS AND EXPORTS OF GOODS, RUSSIA

JANUARY 2009 CURRENCY DEVALUATION

immediate 20 % devaluation in the BYB, implemented on January 2, 2009

$2.5bn (£1.7bn, €1.8bn) IMF emergency loan, $1 bn credit from Russia, $ 500 mln from Venezuela

the central bank raised interest rates from 12 to 14%

possible devaluation in the future by 25 %

BELARUSIAN RURLE OFFICIAL AVERAGE EXCHANGE RATE AGAINST FOREIGN CURRENCY

Period Russian ruble

US dollar

Euro

2008

December

78.26 2 189.82 2 935.04

2009

January 84.36 2 667.49 3 544.27

February 78.39 2 806.94 3 595.02

Source: National Bank of Belarus

CONCLUSION

State-dominated economyHigh dependence on single and

unstable market – RussiaImpact of financial crisis

Need for economic reformsQuestionable effect of

currency devaluation

REFERENCES

CIA factbook National Bank of Belarus IMF IPM Research Center Financial Times, UK Deutsche Welle Narodnaya Volya, Belarusian news

THANK YOU!