Policy Papers
Short-term perspectives of the Belarusian economy
In 2020, the Belarusian economy has faced numerous severe shocks. At the beginning of the year, the shock of oil supply led to a transitory disruption in the business cycle. Later on, more severe shocks associated with a coronavirus pandemic began affecting the national economy. A potential size and the duration of these shocks are very uncertain, and alternative scenarios regarding them are associated with comparable probabilities. Realization of this or that scenario mainly depends on a non-economic factor, i.e. the duration of the coronavirus pandemic. For the Belarusian economy, this situation gives a rise to even wider uncertainty, having in mind its fundamental weaknesses and fragile financial stability. Restricted room for economic policies vs. a vagarious external environment together lead to uncertainty in anti-crisis policy response. The combination of different scenarios of economic shocks and economic policy responses makes realistic at least 10 scenarios of short-term development. These scenarios differ not only quantitatively, but also qualitatively. For instance, some of them are associated with financial stresses and substantial deviation from the stance, which was considered as a steady-state (equilibrium) in previous years. In this situation, a traditional approach to short-term forecasting relying upon this or that class of macromodels seems to become ineffective and misleading, as it cannot reflect a wide range of potential developments. This paper employs and combines different tools of macroeconomic analysis, which is argued to be more effective for uncovering alternative scenarios. For these scenarios, the study reports indicative estimates for main macroeconomic variables. Some of them are fraught with a substantial decline in GDP and/or painful financial stress. Preventing or mitigating such dangerous developments requires proper launching and the implementation of the anti-crisis policy response. Moreover, it is important to launch anti-crisis packages for all potential scenarios, including most unfavorable ones, even if their probability today is considered not that high.
The Policy Paper is available only in Russian.