EDB investment portfolio


26 projects

$988.2 million

14.84% of the total

EFSD investment portfolio


2 projects

$4 560 million

82.1% of the total

Belarus became a full member of Eurasian Development Bank in June 2010. Its contribution to the Bank’s capital is US $15 million.



The growth of economic activity in the Republic of Belarus was maintained in 4Q 2017. According to the National Statistical Committee of the Republic of Belarus, the country’s GDP increased by 2.4% in 2017 after falling by 2.5% a year earlier. As a result, economic growth was 1.7% for the first three quarters of 2017. According to our estimates, in 4Q the negative output gap in the Republic of Belarus decreased to 0.9% from 2.1% a quarter earlier.

Factors leading to a recovery of economic activity in 2017 were:

  • an increase in external demand and a weakening of the Belarusian ruble’s real exchange rate, which contributed to an increase in the physical volumes of goods exports (an increase of 7.5% in January-November 2017). After a significant decrease in 2016, consumer demand recovered at a rapid pace amid the population’s rising monetary incomes and a significant softening in lending conditions. The increase in retail trade turnover in 2017 was 3.8% (compared with a fall of 4.2% in 2016). At the same time, increased consumer demand led to a significant increase in imports of goods and services, the physical volumes of which increased by 13% in January-November 2017 YoY.
  • Investment activity accelerated significantly in 2H 2017, which was due to increased expenditure on the purchase of machinery, equipment and vehicles, as well as a reduction in construction and installation works’ negative contribution. Investments in fixed assets increased by 5.3% in the year 2017 (compared with decreases of 17.4% and 17.5% in 2016 and 2015, respectively).
  • The volume of industrial production increased by 6.1% in 2017, which is the highest increase since 2011. Manufacturing (annual growth of 7%) was the main contributor, with an increase in volumes observed in all major areas of activity. Industrial growth was driven by a rise in economic activity within the country and its trading partners, as well as an increase in the price competitiveness of Belarusian producers against the background of a weakening in the real exchange rate of the Belarusian ruble.

A shift in the harvesting period due to climatic conditions led to an acceleration of annual growth in agricultural production in 4Q 2017 to 14%. As a result, in 2017 the production of agricultural products increased by 4.1% compared with 2016 (and up 3.3% YoY a year earlier).

A decrease in lending from state programs in 2017 was one of the main factors in the reduction of housing construction by 11.5% YoY (a year earlier, the decline in housing construction was 15.2%).


Annual inflation in 2017 was 4.6%, which is a record low for the Republic of Belarus. Factors contributing to the reduction of inflation from 10.6% in 2016 were weak domestic demand, the disinflationary influence of trading partners (primarily a reduction in Russian inflation), and a slowdown in the growth of administratively regulated prices.

Despite an active slowdown in inflation in 4Q 2017, factors that risk accelerating inflationary processes continue to accumulate in the economy. Wage growth rates since the second half of 2017 exceed the growth rate of labor productivity. The higher imports of goods compared with exports along with an increase in household incomes led to a noticeable increase in demand on the foreign exchange market, which at the end of the year was reflected in a certain weakening of the Belarusian ruble. The population’s inflationary expectations, according to the National Bank of the Republic of Belarus, significantly exceed the inflation target level (11.9% against a target of 6% in 2018). These factors carry the risk of the 6% inflation target being overshot.

Exchange Rate

In 4Q 2017, the Republic of Belarus’ foreign exchange market saw a significant increase in foreign-currency demand. Overall in 2017, the net purchase of foreign currency by enterprises amounted to USD 880 million (compared with USD 206 million in 2016), while net sales to the population amounted to USD 1.759 billion (compared with USD 1.894 billion in 2016). The change on the foreign exchange market in 2017 is largely due to rapid growth in the imports of goods (including consumer imports) against a backdrop of the recovery in household incomes and a softening in credit conditions.

The emergence of net demand on the foreign exchange market by its major participants in 4Q 2017 led to a further weakening of the nominal exchange rate of the Belarusian ruble, which amounted to 1.1% versus a basket of foreign currencies for the quarter (6% from the beginning of the year).

A fall in the nominal rate against a background of continued higher inflation compared with trading partners was the main factor in the weakening of the real effective exchange rate, which in January-December 2017 was 4.7% YoY. At the same time, the weakening of the real exchange rate of the Belarusian ruble to the Russian ruble over the same period amounted to 8.3%, which supported Belarusian producers’ exports.

The positive balance of foreign trade in goods and services in January-November 2017 increased by USD 204.2 million compared to the same period in 2016, reaching USD 359 million. The positive trend was due to an improvement in the balance of trade for services, where the largest contribution is made by transport services and the telecommunications, computer and information services sector.

The increase in the positive balance of trade for services, together with the increase in the secondary income surplus (largely due to the agreement reached on the transfer from the Russian budget to the Belarus budget of export customs duties on oil instead of actual delivery of 6 million tons of oil), helped reduce the current account deficit, which amounted to USD 0.3 billion (0.9% of GDP) for JanuarySeptember 2017 (compared with a deficit of USD 1 billion or 3% of GDP a year  earlier).

In 2017, the Republic of Belarus’ international reserves increased by USD 2.4 billion and amounted to USD 7.3 billion as of 1 January 2018. The growth in reserves was a result of a positive balance of National Bank interventions on the currency market, the receipt of funds from the placement by the Ministry of Finance and National Bank of foreign currency bonds on the domestic market, and the collection of export duties from oil and oil products, as well as a tranche from the Eurasian Fund for Stabilization and Development and a Russian Government loan. Despite a significant increase in reserves, their level remains lower than the total value of three-months’ worth of imported goods and services (as of the beginning of December 2017, the reserves amounted to about 2.5 months’ worth of imports).

As a result, by the end of 2018, the National Bank of the Republic of Belarus faces a goal of attaining a reserve level of at least USD 6 billion, which is more than USD 1 billion less than their volume at the beginning of 2018. Most likely, the planned reduction in reserves is due to the use of a significant amount of foreign currency funds from government accounts at the National Bank (which increased in 2017 due to external borrowings) to repay public debt.

Fiscal Policy

The 2017 budget had a surplus of BYR 2.8 billion or 2.7% of GDP (in 2016 it had a surplus of BYR 1 billion or 1% of GDP). The budget surplus was aided by a reduction in spending on government economic activity and the national economy (by 0.8% and 1.2%, respectively) and a significant increase in revenues (up 11.5%), largely driven by the recovery in economic activity.

In accordance with the Republic of Belarus law «On the Republic Budget for 2018,» the budget surplus is to be increased by the end of 2018 to BYR 7.3 billion in order to make payments for domestic and external debt.

According to the Belarus Ministry of Finance, state debt as of 1 January 2018 amounted to 39.3% of GDP, including external debt of 30.7% of GDP (USD 16.7 billion) and domestic debt of 8.6% of GDP. In 2017, public debt increased by 14.1%, which was entirely due to the increase in external debt obligations. The domestic state debt for 2017 was reduced by 10.3%.

In 2018, payments for repayment and servicing of public debt will increase and will amount to about BYR 8 billion, including approximately USD 3.1 billion for repayment of external debt.

Monetary Policy

The significant slowdown in inflationary processes in 2017 was reflected in an active reduction of the refinancing rate. Over the course of the year, the rate was lowered eight times from a level of 18% at the beginning of 2017 to reach 11% in October. The refinancing rate was unchanged at the meetings of the National Bank of the Republic of Belarus Board in 4Q 2017, which is explained by the increased risks of accelerating inflation.

Credit and deposit rates also followed a downward trend. The rates for new ruble loans decreased by 9.2 p.p from December 2016 to December 2017. The increased availability of credit led to significant growth of lending in the national currency (a 21% increase in 2017). The growth in consumer lending (up by 75.1% in 2017) poses the greatest risk to the economy and the financial system, given the high share of imported goods being consumed.

In 2018, the National Bank of the Republic of Belarus will retain its monetary targeting regime. According to the regulator’s forecast, the increase in the average broad money supply will be 9%-12% (December 2018 YoY). The National Bank announced the change in the monetary policy operational targets starting from January 2018: instead of the ruble monetary base, the interest rate on one-day interbank loans in the national currency will be used.

EDB’s investment activities in Belarus in 2013-2017 included the following:

  • The Bank will continue to support the State Innovation Development Programme for 2011-2015.
  • The Bank will also continue to finance real sector enterprises with high export potential (transport and agricultural mechanical engineering, the chemical sector and food industry). It will also help to introduce lease products in order to promote Belarusian goods in the member states.
  • EDB will continue to invest in the power sector, including network development, efficient generation and other projects that will help to reduce the country’s dependency on imported energy carriers and improve its energy efficiency.
  • In addition, the Bank will support transport projects enhancing Belarus’ transit potential.
  • It will also continue to finance the banking sector within its targeted programmes for SMEs as an institutional basis of the market economy.

Minsk Representative Office

70 Myasnikov St., office 310, Minsk, 220030, Republic of Belarus