Economic Developments in the Republic of Belarus: Increasing Competitiveness and Growth

Wednesday, June 11

Governor Nadezhda Ermakova, Central Bank of Belarus

On June 11, 2014, Ms. Nadezhda Ermakova, Chairperson of the National Bank of the Republic of Belarus (NBRB), visited the Joint Vienna Institute to deliver a lecture on “Economic Developments in Belarus: Increasing Competitiveness and Growth” to participants from the Applied Economic Policy (AEP) course. The lecture focussed on key characteristics of the economy, progress since the 1990s, and current economic challenges. 

With close to 10 million inhabitants, Belarus is an average-sized open economy, integrated into regional and world markets. In 2013, exports of goods and services accounted for more than 60 percent GDP, with Russia and the European Union being the main trading partners. Influenced by its past, the structure of the Belarusian economy remains tilted towards engineering and processing industries and is dependent on imported oil and gas. Following a recession at the beginning of the transformation process in the early 1990s, economic growth picked-up, supported by a gradual transition to a market-based economy. During the past 15 years, GDP has more than doubled in real terms.

Governor Ermakova devoted a substantial part of her lecture to banking sector issues and the National Bank’s core responsibilities of ensuring price and financial stability. She noted that since the central bank was established in 1992, international best practices have served as the benchmark for banking supervision and prudential regulation. By the mid-2000s, the NBRB had introduced a number of risk assessment methodologies complying with Basel II, and the Bank has been phasing in the new Basel III standards for capital adequacy since 2011.

The past decade was a challenging period for monetary policy, Ms. Ermakova explained. The NBRB’s exchange-rate-based policy strategy came under pressure in 2009-2011 as energy import prices increased sharply and traditional export markets were squeezed, but expansionary domestic policies continued. A deteriorating current account and mounting external indebtedness made a realignment of the exchange rate necessary. At the same time, the National Bank increased its refinancing rate and abolished subsidized refinancing practices to limit credit expansion. More recently, the NBRB has focussed more on price stability and is considering a transition to an inflation-targeting regime. In the medium-term, the NBRB aims to slow inflation to 5–6 percent per annum; an important prerequisite for sustaining economic growth.

In the concluding part of her presentation, Ms. Ermakova talked about the challenges and  opportunities of the recently created Eurasian Economic Union (EEU). Belarus, Kazakhstan and Russia are working on harmonizing their legal frameworks in the financial sector and aim to establish a common financial market. The free movement of capital, labour and goods in the Union is expected to foster competition in all sectors and provide a new impetus for economic development.

A lively discussion with AEP participants followed. Questions ranged from monetary policy issues, obstacles to FDI flows, challenges for macroeconomic stability, to the prospects of introducing a common currency in the EEU.

In his concluding remarks, Mr. Norbert Funke, Director of the JVI, thanked Governor Ermakova for honoring the JVI with her visit and delivering a high-level guest lecture. He was looking forward to even stronger cooperation in capacity building between the JVI and Belarus.

Mikhail Pranovich, Economist, JVI


Event Photos

Share this page

© 2021 Joint Vienna Institute, Mariahilferstrasse 97, A-1060 Vienna, Austria, Tel: +43 1 798-9495, Email: