Macro: COVID-19 Update Belarus: Need for financial support to fight a (non-)existent pandemic

The Coronavirus has been spreading rapidly since mid-April and the number of infected people has already exceeded 28,000. Since early May, the epidemic has entered the so-called plateau stage - the growth is more than 900 confirmed cases per day. Despite the significant Coronavirus spreading the number of fatalities remained at a very low level just 0.6% of confirmed cases or overall 156 deaths. Even with the significant increase in new COVID-19 cases, the country's leadership has not imposed a quarantine or closed the borders.
The Decree 143 On Supporting the Economy signed by president Lukashenko contains some measures to mitigate the impact of the epidemic. Apart from that, the National Bank of Belarus (NBB) has taken certain steps to support the real sector. Due to the COVID-19 impact and mounting financing needs Belarus' government adopted a very proactive approach targeting multiple sources of loans and borrowing programs, including the applications for the IMFs Rapid Financing Instrument (RFI).

The double shock of Coronavirus and lower oil prices negatively affect the economy of Belarus. We adjusted our GDP growth outlook down to -4.5% in 2020, which is deviates little from projections of International Financial Institutions. If Russian financial support remains significantly reduced, Belarus may find it difficult to show a strong rebound next year. If relations with Russia improve, the recovery could become stronger, more in line with regional peers.

This Research was produced and first published by Raiffeisen Bank International AG which is supervised by the Austrian Financial Market Authority and the National Bank of Austria.