baltic states and belarus real estate market review - Colliers

Real Estate Market Review 2011 | Belarus Economic Overview
Economic Overview
There were a lot of important events in economy of Belarus during 2010. The year was the first
post-crisis year for Belarus, characterized by having positive movement in macro economical
indicators such as growth of the GDP, industrial production index, reduction of unemployment
and maintaining inflation within the forecast. Average gross salary increased by 24 per cent,
amounting to EUR 313/month. In order to stimulate the economy, the National Bank has reduced
the base interest rate on six occasions - from 13.5 to 10.5 per cent.
The positions of Belarus in international ratings during 2010 were quite stable. In the Doing
Business 2011 rating Belarus moved from 64th to 68th place. The Index of Economic Freedom
the position has improved from 167th to 155th place, but not leaving the group of countries with
a low level of economical freedom. An increase in funding and salaries in state-run enterprises
(about half of all employment in Belarus) has led to an improvement in the Legatum Prosperity
Index 2010 by 1 position to 54th place.
A negative balance of foreign trade forced further use of foreign reserves (and subsequent
refilling of the reserves). The current account deficit reached 13.6 per cent of GDP, against 11.8
per cent in 2009. The IMF estimated that the main causes of the high account deficits in 2010
and 2011 are rapid credit expansion and significant increase in wages and salaries in late 2010.
New legislation regarding the release of Belarusian Eurobonds in 2010 - 2011 for the sum up to
USD 2 billion was issued in May 2010. The debut issue of Eurobonds in Belarus for USD 1 billion
was carried out in 3Q 2010. Total external debt has increased by 22.8 per cent in EUR within 9
month of 2010. An additional EUR 200 million (in Russian Rubles) of bonds were sold in
December 2010 through Moscow based stock exchange MICEX.
The country government realizes the need of reforms and privatization. New legislation “Decree
No 4: The development of entrepreneurship and stimulating business activity in Belarus” was
issued in December 2010. Major attention is paid to increasing the efficiency of taxation and the
simplification of legislation. Some changes in privatization legislation were made at the end of
2010. The head of the National Bank of Belarus forecasted that more than EUR 2 billion of
savings can be achieved in 2011 through privatization.
Key economic indicators of belarus
f - forecast
*The estimation of the exchange rate of the Belarusian ruble adopted a ‘currency basket” method in 2009 (whereas previously only comparison with the US Dollar was made). The currency basket
value is calculated as the geometric average of the two-way exchange rates of the Belarusian ruble versus the US dollar (USD), Euro (EUR), Russian ruble (RUB) at the specific date
**third quarter 2010
Source: National Bank of the Republic of Belarus, Ministry of Economy of the Republic of Belarus, International Monetary Fund
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011f
GDP Current Prices, bln EUR* 15.5 15.7 18.6 24.2 29.4 33.0 41.0 35.8 41.2 43.9
GDP Growth (real), % yoy 5.0 7.0 11.4 9.4 10.0 8.6 10.0 0.2 7,6 6.2
Industrial Production, % yoy 4.5 7.1 15.9 10.5 11.4 8.7 11.5 -2.8 11.3 9.5
Unemployment Rate, % avg 3.0 3.1 1.9 1.5 1.2 1.0 0.8 0.9 0.7 1.5
Total Central Government Debt, % of GDP 2.5 1.9 2.1 2.0 1.6 4.5 5.9 17.1 19.6 23.3
PPI, % yoy 41.4 37.5 24.1 12.1 8.3 16.2 12.8 14.5 13.6 8.9
CPI, % yoy 43.0 28.0 18.1 10.3 7.0 8.4 14.8 13.0 9.9 10.8
Fiscal Deficit, % of GDP -0.2 -1.7 0.04 -0.7 2.2 -1.5 1.9 -1.0 -2.4 -3
Export, bln EUR 8.45 8.8 11.0 12.7 15.65 16.3 22.5 15.3 22.5 22.3
Import, bln EUR 9.5 10.2 13.2 13.3 17.7 18.5 27.0 20.6 28.1 28.7
Current Account, bln EUR -0.3 -0.4 -1.0 0.4 -1.2 -2.1 -2.5 -5.3 -5.60 -6.4
Current Account, % of GDP -2.1 -2.4 -5.2 1.7 -4.1 -6.6 -8.0 -9.76 -11.7 -9.0
FDI, mln EUR 318.8 602.5 692.5 362.3 596.4 960.0 1,559.1 1,635.0 1,069,9** n/a
Cumulative FDI, mln EUR 1,910.0 1,674.3 1,649.5 1,913.1 2,161.6 3,318.6 4,542.9 6,121.9 n/a n/a
BYR/USD avg. 1,804.0 2,075.0 2,163.73 2,155.13 2,146.28 2,144.76 2,136.6 2,791.8 2,979.5 3,217.8
BYR/EUR avg. 1,704.0 2,353.0 2,698.27 2,684.29 2,714.88 2,897.28 3,143.0 3,893.0 3,954.1 4,270.4
CONTACTS: ANDREY PAVLYSHKO - a.pavlyshko@colliers.by l ANDREY ALESHKIN - a.aleshkin@colliers.by
Colliers International | p. 78