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Experts: Belarus’ GDP To Fall By 2% More In 2016

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Experts: Belarus’ GDP To Fall By 2% More In 2016

The external debt of Belarus in relation to the gross domestic product may approach 100% in 2017.

This assessment is contained in the macroeconomic forecast, which was presented in Minsk on June 2 by the experts of the IPM Research Center and the German Economic Team in Belarus (GET Belarus).

As BelaPAN news agency reports, the experts expect that, due to the devaluation of the ruble, the Belarusian GDP in dollar terms will significantly reduce — from 76.2 billion dollars in 2014 to 45.3 billion and 44.8 billion dollars in 2016-2017, respectively.

“Thus, despite the relatively steady absolute level of the gross external debt, its relative indicators will sharply go up. This also mean sharp growth of the leverage, which could also become an activator of new shocks,” — stated in the survey.

According to the experts’ assessments, the total external debt to the GDP in Belarus will increase from 72.5% in 2015 to 90.1% in 2016 and to 95.7% in 2017.

In 2016, they believe that the Belarusian economy will continue to go down and GDP will decrease by 2% this year.

"The duration of the recession is determined by a whole list of factors. The first and most important is the depression of investment demand. Firms are not predisposed to investments, since the potential growth of the economy remains very weak, "— say the authors of the macroeconomic forecast.

The second activator of the recession, the economists say, is the decline in consumer demand in Belarus. "In 2016, we expect that the households’ spending on final consumption will be reduced significantly (by 5.1%) as 2015 has put a start only to the initial phase of their adaptation to the new reality", — the experts predict.

In their view, the scenario of slow recovery of the Belarusian economy (assuming GDP growth of 0.6% in 2017) can be realized only in 2017.

"However, because such a small increase will occur after a deep and prolonged recession, the characteristic" fade into stagnation "seems more appropriate term for 2017, rather than the restoration of growth," — the authors of the macroeconomic forecast underline.

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