14.04.2022
Expert opinion. Belarus Economy Monitor
Economic growth environment remains weak
Near-future economic growth prospects will depend on exports increase capacity. However, as a wave of uncertainty will come into play due to the effects of sanctions, narrowing opportunities to attract resources from foreign markets, questionable stability in the region, and potential internal and external shocks, one should not expect this year to be as successful as the last year.
Economic migration tends to increase. Wage gap, if compared to wages in neighboring countries, keeps growing
Not everyone was able to enjoy successful economy in 2021, which is clearly visible in the difference in the average wage growth: while wages in the production sector increased by 9.5% in real terms, wages in the construction sector remained unchanged, and wages in the IT-sector decreased by 5.3%. In general, the average wage gap between Belarus and some of its neighbors has increased, which may trigger a more intense economic migration. Experts do not project a significant increase in real wages this year, and if sanctions are in force, experts forecast a slight decline.
Inflation risks remain elevated
The external environment created favorable conditions for a sharp increase in exports of Belarusian products and the ability to raise their prices. At the same time, the global price rise has also affected the Belarusian market. However, it was not the only reason: pressure on prices was exerted by the expected inflation, which was 14.2% in December. The desire to regulate prices has not been not left aside: despite the measures taken, regulated prices and tariffs rose by 9% in annual terms in December 2021. Global inflation slowdown will affect the inflation slowdown in Belarus this year, but inflation expectations, higher taxes and rates will cause a price growth inside the country. As a result, inflation at the end of the year may get close to 10% again.
