The Economy Enters a Crisis That Belarus Never Seen Before

Two trends are emerging.

The Belarusian economy has recently been reminiscent of a ship in distress. Its inhabitants are like passengers, wondering when the ship finally goes down, says Salidarnasts.

In 2021, there are two disastrous trends for the economy of Belarus.

The first is the rapid depletion of the sources of foreign currency proceeds into the country. First of all, it concerns the High-Tech Park that in the past few years was the main engine of economic growth in Belarus. Now the situation has drastically changed.

IT specialists are fleeing the country en masse, moving with their families to more prosperous countries: Poland, Lithuania, Ukraine and Georgia. Currency savings of the Belarusian economy are leaking with them. It is not a coincidence that this year foreign currency deposits have shrunk to their lowest level in the last five years.

The second alarming trend is that the gold and foreign exchange reserves of Belarus show a low level, amounting only to about USD 7 billion. It is worth attention as this fx pile serves to pay off debts, and a lot of them were taken during recent years.

In particular, the years 2022 and 2023 are the years for Belarus to repay its largest foreign debts.

For example, the Belarusian authorities will have to spend $1.8 billion on debt repayment next year. However, this is nothing compared to the repayments of 2023, when $2.8 billion must be spent on the borrowings!

The Belarusian economy has never faced such a situation when the peak of debt repayments coincided with the most severe economic recession for the past years. One can say Belarus expects a perfect storm, which is hard to overcome.

However, the main problem lies not in the weather conditions, but in the strength of the "ship" itself. After all, strong market economies overcome economic difficulties without any problems. On the other hand, if we mean the rusty barge, built by Lukashenka and his vertical power structures, one has to patch up the holes every time, hoping for external help.

Obviously, the Belarusian authorities will try to survive the years 2022 and 2023 in the old way - at the expense of the Russian loans. However, it is not a secret what the Kremlin will ask for in return this time.