Belarus (literally translated as ‘White Rus’) is a landlocked economy in transition, located in Eastern Europe and neighboring Ukraine, the Russian Federation, Latvia, Lithuania and Poland.
Despite being commonly dubbed the last dictatorship in Europe, it is a rapidly growing economy deeply emerged in international trade. In 1H08, for example, the country achieved an impressive 10.4% GDP growth – second in the CIS region after Azerbaijan – despite its heavy dependence on imported fossil fuels that are mainly from Russia.
Services in Belarus account for a much greater share of GDP than in Ukraine (43% of value added in Belarus vs. 32% in Ukraine in 2006). Despite being often imaged as an agricultural country, Belarus’ agriculture accounts for 7.5% of GDP (vs. 8.0% for Ukraine). Industrial output equals 27.6% of GDP (25.5% in Ukraine). Overall, the real sector in Belarus, at a glance, is quite similar to Ukraine except that Belarus’ is inclined towards light industries while Ukraine’s industry is more metallurgy-oriented.
Similarly to Ukraine, Belarus is a net importer with a trade balance deficit of USD 1.08 bln in 1H08. The trade balance deficit in 2007 was equivalent to 6.6% of GDP (3.9% in 2006) and is expected to increase further in 2008. Belarus’ main import is Russian gas, which is heavily discounted for political reasons, as well as other fuel and nonfuel minerals. Overall, Russia accounts for 60% of Belarus’ imports. Machinery and equipment is the main export article. About 50% of Belarus exports go to the EU, while Russia obtains around 35% of Belarus’ exports. Ukraine provides 5.4% of Belarusian imports and receives around 6.1% of Belarusian exports.
FDI into the Belarusian economy has recently grown rapidly with USD 1.8 bln worth of net FDI in 2007 (506% YoY growth) and USD 2.4 bln worth of gross FDI (240% YoY growth). Similarly to Ukraine, FDI accounts for 5.4% of GDP. Most of the FDI inflow is due to equity capital inflows (80% of FDI); reinvested earnings are about 11% of FDI.
In this report we introduce the reader to the fundamentals of the Belarusian economy as well as provide a brief introduction into the Belarusian investment environment and the stock market.
Table of Content:
6.M&A market activity
6.Активность на рынке слияний и поглощении
7.Прямые иностранные инвестиции
Перечень диаграмм и графиков обзора:
1. Geographical location of Belarus
2. Real GDP dynamics
3. GDP structure, 2007
4. Industrial output dynamics
5. Industrial output structure in Belarus (i) and Ukraine (ii), 2007
6. Major industrial sectors dynamics
7. Major industrial sectors growth rates
8. Merchandise balance dynamics in Belarus
9. Merchandise balance ratio to GDP of Belarus compared to Ukraine
10. Merchandise trade by sector, 2007
11. Foreign trade structure by sector, 2007
12. Foreign trade structure by country, 2007
13. Consumer prices dynamics
14. Nominal and real earnings dynamics
15. Volumes of the equities issuance (as of January 1)
16. Volumes of the bonds issuance (as of January 1)
17. Volumes of securities trade, USD bln
18. Quotation list A of the Belarusian stock exchange
19. Quotation list B of the Belarusian stock exchange
20. M&A activity, breakdown by sectors, USD bln, 2006-2008
21. FDI inflow, USD bln
22. Macroeconomic overview