In the last month before the Presidential elections, the Belarusian economy continues to disappoint. Although decline in GDP has slowed, the -3.5 per cent growth has failed to impress. The Belarusian rouble continues to depreciate as oil prices plunge. The authorities have promised further liberalisation of the economy in the near future. For now the authorities are tightening the rules and raising taxes. But a relatively low inflation rates gives hope to the possibility of macroeconomic stabilization and future cooperation with the IMF.

The Belarusian economy keeps on contracting: in January-July it decreased by 4 per cent. However, a number of positive trends have arisen: wages and employment are stabilising, along with improvements in current account balances. The latter might signal an imminent recovery, but that remains questionable. Increased sensitivity to global financial turbulence and the lack of policy capacities may cause a deeper and sustained recession.

A monetary union between Russia and Belarus has been on the table for ages. In the early 2000s it was not just an attractive political idea but a very likely project that was heavily worked on by the authorities. In the end, economists and analysts concluded that a monetary union with Russia wouldn’t be beneficial for Belarus and they supported their conclusion with three quite powerful arguments.

BEROC Policy Parers were published in Belarussian Yearbook 2014.

The first half of the year has shown clear evidence that the Belarusian economy needs better incentives to revive its industrial strengths.