After several years of slow growth, 2015 became the first year of true recession. GDP fell by 3.9 per cent in January-November; employment declined over the year. The Belarusian rouble depreciated by almost 60 per cent.

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.

In an attempt to fixate and extend the effects of currency devaluation, the Belarusian government and the National Bank have chosen internal devaluation as its leading policy. Internal devaluation means lower incomes and a more prudent fiscal and monetary policy will follow. But can internal devaluation serve as an alternative to structural reforms in Belarus? And, most importantly, can the authorities truly commit to tightening up their policies in presidential election year and facing threats of unemployment?

The main economic events for October in Belarus revolve around Russia: the ratification of the Eurasian Economic Union, the continued fighting over the re-export of banned European foodstuffs to Russia, and, finally, an argument over Russia’s oil tax manoeuvre. Russia’s actions, both political and economic, further complicate the situation with the Belarusian economy, which is exhibiting subpar growth for the third year in a row. Ironically, its troubled economy is forcing the Belarusian government to seek even more assistance from Russia.