Belarus Economy 2008

Economy - overview:
Belarus has seen little structural reform since 1995, when President LUKASHENKO launched the country on the path of "market socialism." In keeping with this policy, LUKASHENKO reimposed administrative controls over prices and currency exchange rates and expanded the state's right to intervene in the management of private enterprises. Since 2005, the government has re-nationalized a number of private companies. In addition, businesses have been subject to pressure by central and local governments, e.g., arbitrary changes in regulations, numerous rigorous inspections, retroactive application of new business regulations, and arrests of "disruptive" businessmen and factory owners. A wide range of redistributive policies has helped those at the bottom of the ladder; the Gini coefficient is among the lowest in the world. Because of these restrictive economic policies, Belarus has had trouble attracting foreign investment. Nevertheless, GDP growth has been strong in recent years, reaching nearly 8% in 2007, despite the roadblocks of a tough, centrally directed economy with a high, but decreasing, rate of inflation. Belarus receives heavily discounted oil and natural gas from Russia and much of Belarus' growth can be attributed to the re-export of Russian oil at market prices. Trade with Russia - by far its largest single trade partner - decreased in 2007, largely as a result of a change in the way the Value Added Tax (VAT) on trade was collected. Russia has introduced an export duty on oil shipped to Belarus, which will increase gradually through 2009, and a requirement that Belarusian duties on re-exported Russian oil be shared with Russia - 80% will go to Russia in 2008, and 85% in 2009. Russia also increased Belarusian natural gas prices from $47 per thousand cubic meters (tcm) to $100 per tcm in 2007, and plans to increase prices gradually to world levels by 2011. Russia's recent policy of bringing energy prices for Belarus to world market levels may result in a slowdown in economic growth in Belarus over the next few years. Some policy measures, including tightening of fiscal and monetary policies, improving energy efficiency, and diversifying exports, have been introduced, but external borrowing has been the main mechanism used to manage the growing pressures on the economy.

GDP (purchasing power parity):
$104.7 billion (2007 est.)

GDP (official exchange rate):
$31.7 billion (2007 est.)

GDP - real growth rate:
6.9% (2007 est.)

GDP - per capita (PPP):
$10,200 (2007 est.)

GDP - composition by sector:
agriculture: 8.7%
industry: 40.6%
services: 50.6% (2007 est.)

Labor force:
4.3 million (31 December 2005)

Labor force - by occupation:
agriculture: 14%
industry: 34.7%
services: 51.3% (2003 est.)

Unemployment rate:
1.6% officially registered unemployed; large number of underemployed workers (2005)

Population below poverty line:
27.1% (2003 est.)

Household income or consumption by percentage share:
lowest 10%: 3.4%
highest 10%: 23.5% (2002)

Distribution of family income - Gini index:
29.7 (2002)

Inflation rate (consumer prices):
8.3% (2007 est.)

Investment (gross fixed):
29.8% of GDP (2007 est.)

Budget:
revenues: $15.35 billion
expenditures: $16.78 billion (2007 est.)

Agriculture - products:
grain, potatoes, vegetables, sugar beets, flax; beef, milk

Industries:
metal-cutting machine tools, tractors, trucks, earthmovers, motorcycles, televisions, chemical fibers, fertilizer, textiles, radios, refrigerators

Industrial production growth rate:
5% (2007 est.)

Electricity - production:
29.08 billion kWh (2005)

Electricity - consumption:
29.49 billion kWh (2005)

Electricity - exports:
5.053 billion kWh (2005)

Electricity - imports:
9.091 billion kWh (2005)

Oil - production:
33,700 bbl/day (2005 est.)

Oil - consumption:
156,000 bbl/day (2005 est.)

Oil - exports:
249,900 bbl/day (2004 est.)

Oil - imports:
378,200 bbl/day (2004 est.)

Oil - proved reserves:
198 million bbl (1 January 2006 est.)

natural gas - production:
165 million cu m (2005 est.)

natural gas - consumption:
19.47 billion cu m (2005 est.)

natural gas - exports:
0 cu m (2005 est.)

natural gas - imports:
19.31 billion cu m (2005)

natural gas - proved reserves:
2.716 billion cu m (1 January 2006 est.)

Current account balance:
-$3.056 billion (2007 est.)

Exports:
$22.91 billion f.o.b. (2007 est.)

Exports - commodities:
machinery and equipment, mineral products, chemicals, metals, textiles, foodstuffs

Exports - partners:
Russia 34.7%, Netherlands 17.7%, UK 7.5%, Ukraine 6.3%, Poland 5.2% (2006)

Imports:
$27.05 billion f.o.b. (2007 est.)

Imports - partners:
Russia 58.6%, Germany 7.5%, Ukraine 5.5% (2006)

Economic aid - recipient:
$53.76 million (2005)

Reserves of foreign exchange and gold:
$1.474 billion (31 December 2007 est.)

Debt - external:
$9.272 billion (30 June 2007)

Market value of publicly traded shares:
$NA

Currency (code):
Belarusian ruble (BYB/BYR)

Exchange rates:
Belarusian rubles per US dollar - 2,145 (2007), 2,144.6 (2006), 2,150 (2005), 2,160.26 (2004), 2,051.27 (2003)