Presented by Lev Lvovskiy during the conference "Belarus at the crossroads: The complex role of sanctions in the context of totalitarian backsliding" on April 23, 2024.

1. Belarusian Economy 2024
Lev Lvovskiy

2. • 1995-2011 Rapid growth from low to
middle income
• 2011-2021 Stagnation
• 2022: Political sanctions and war
sanctions effectively start. Yearly
decline 4.7%
• 2023: Fast [quantitative] recovery
Qualitatively very different economy
Brief History
GDP at constant prices
(seasonally adjusted)

3. • International trade: from “1/3 1/3 1/3” doctrine to full dependance on Russia
• >70% trade with Russia
• 10-15% trade through Russia
• Loss of high-margin markets
• Failed attempts to find “Friends in Africa”
• IT: from 6% of GDP growing at 8% rate, to 5% of GDP declining at 6-8%
• Relocation of 25-30% of personnel
• Relocation of 70% of startups
• Remaining have larger focus on lower margin markets and projects
Qualitative Changes: Trade & IT

4. • Transit: from 1 Belt 1 Road to closed borders -40% in transit volumes
• EU borders: continuation of mass migrant crossing attempts; closures of
transit points; more restrictions and regulations (from both sides)
• Russia: meanwhile practically full support, but capacity issues; potentially
monopolistic approach
Qualitative Changes: Transit

5. • Government experimented with soviet-style practices .. and was successful
More is coming
• Excessive stimulation of economy in 2023, both monetary and fiscal
• Price controls
• International business controls
• Labor market controls (forthcoming)
• Information concealing
Qualitative Changes: Interventionalism

6. • 2022 decline smaller than expected
• 2023 recovery is faster than expected
Business and public optimism
• Demographic problems + migration
Salaries grow faster than the output
• Business faces increased [logistic and labor] costs, unable to increase prices
• SOE operate at maximum capacity
• Huge dependence on just 1 partner [Russia]
• No [visible] attempts to solve any key problems
Instead of Summary

7. • G7 oil price cap lead to Urals/Brent discount (30$ after introduction, 10-15$
currently)
• Belarus buys Urals, refines and sells oil products at ≈ international prices
• Additional profits 2022: USD 1.7bn, 2023: USD 1.9bn (2.3, 2.6% GDP respectively)
• Could bring USD 0.9 bn – 1.4 bn in 2024
• Attacks on Russian refineries
• May create local [logistical] deficit of oil products in Central Russia and at war
fronts
• Potential upside for Belarus USD 1 – 3 bn depending on actual capacity
• Conditional on Ukraine not bombing Belarusian refineries…
Bonus: Oil