In an interview with Pozirk, Sviatlana Tsikhanouskaya’s Advisor on Economic Reforms and Vice President of ABBA, Aleś Alachnovič, shared his view on the major challenges facing the Belarusian economy in 2024.
The advisor explained that the Belarusian economy is expected to grow by 1-2%, which is twice slower than the economies of Poland, Lithuania, and Latvia. Greater growth could be triggered by two factors. One is a “positive shock”, meaning an event in the world that will cause a significant increase in prices or demand for Belarusian exports. Another is substantial financial inflows from Russia.
Aleś Alachnovič does not see any positive shocks for the Belarusian economy coming. The reason is its link to the stagnating Russian economy. The second factor is also unlikely: “After 2020, Moscow has been willing to defer repayment of old debts, but it has allocated little new money”.
The advisor also warned about inflation: “To retain or find new employees, companies raise wages. If labor market shortages continue in 2024, wages might grow faster than the economy. People will spend more, forcing companies to raise prices, which will stimulate inflation”. Aleś Alachnovič sees prices potentially rising by 8-9% by the end of 2024.
Thus, stagnation, inflation, and brain drain will be the main challenges for the Belarusian economy this year. Aleś Alachnovič explained what will help avoid this in the new Belarus.
📌 Democratic elections and an independent judiciary. They will help lift economic sanctions.
📌 Economic liberalization and structural reforms. They will include limiting the role of the state in the economy, creating equal and favorable conditions for both private and state-owned businesses, improving management quality in state-owned enterprises with the possibility of privatization, and enhancing the social protection system.
📌 Integration into the global economy and international support – with the help of the EU, a new Marshall Plan, IMF, World Bank, and other organizations.
The vision on how to rebuild the economy in the new Belarus can be found at the link.
