Belarus Macroeconomic Update : Achieving Stability and Growth
This note assesses recent macroeconomic developments in Belarus and presents a medium-term economic outlook for 2013-2016 in three scenarios. These scenarios are sensitive to underlying assumptions and are provided to illustrate the main macroecono...
| Main Author: | |
|---|---|
| Format: | Report |
| Language: | English en_US |
| Published: |
World Bank, Washington, DC
2017
|
| Subjects: | |
| Online Access: | http://documents.worldbank.org/curated/en/926481486995168511/Belarus-Macroeconomic-update-achieving-stability-and-growth http://hdl.handle.net/10986/26094 |
| Summary: | This note assesses recent macroeconomic
developments in Belarus and presents a medium-term economic
outlook for 2013-2016 in three scenarios. These scenarios
are sensitive to underlying assumptions and are provided to
illustrate the main macroeconomic policy choices, available
to Belarus. The first scenario (baseline scenario) assumes
that the authorities continue macroeconomic policies of the
past year, with alternating phases of policy loosening and
tightening, motivated by attempts to balance growth and
stability. The second scenario (expansionary scenario)
assumes that the authorities pursue more aggressive
expansionary policies (compared to the baseline scenario) to
boost growth in the short term. Prioritizing growth at the
expense of stability will reignite macroeconomic
imbalances.The third scenario (sustainable growth scenario)
assumes that the authorities put in place policies that
ensure macroeconomic stability and provide a basis for
sustainable growth. This includes a policy framework that
(i) maintains the flexible exchange rate regime; (ii)
sustains tight monetary policy, namely containing credit
growth, including under government directed lending programs
to contain inflation and real exchange rate appreciation;
(iii) balances wage growth so that it does not exceed
productivity growth; (iv) maintains tight fiscal policy and
a balanced budget over the medium term. These three
scenarios highlight the main macroeconomic trade-offs that
Belarus is facing in the current environment. This note is
organized as follows: Section one highlights recent
macroeconomic trends; Section two provides the three
macroeconomic scenarios; and Section three provides the
Bank’s recommendations for macroeconomic and structural
policies. Annex one outlines the structural modernization
agenda that could support sustainable medium term growth.
Annex two provides detailed assumptions, underlying the
three scenarios. Annex three presents the results of simple
sensitivity analysis of the potential impact of price
declines in potash fertilizer. |
|---|