New medium-term country risk assessment for Belarus

In mid-July 2024, the CMSR prepared a new medium-term country risk assessment for Belarus, following its own country risk assessment methodology.

Belarus' overall medium-term country risk has not changed since our last assessment in December 2022, and the country is still classified as having a very high medium-term country risk (E).

The CMSR assigns the assessed country to one of five risk categories:

·         A - Minimal medium-term country risk

·         B - Very limited medium-term country risk

·         C - Limited medium-term country risk

·         D - High medium-term country risk

·         E - Very high medium-term country risk

In addition to the final country risk assessment, each country risk category, i.e. political, economic and financial risk, is also classified into one of these five risk categories.

In the medium term, the political risk will remain very high as long as Lukashenko remains in power. The regime's authoritarianism has been strengthened over the last three years and the opposition will remain excluded. Lukashenko will win the presidential elections again next year, so the regime's authoritarianism will continue to increase and Belarus' support for Russia's war in Ukraine will continue. The potential for regime change would arise in the event of a wider political or military crisis in the whole region, which is not expected in the medium term, or in the event of Belarus entering the war in Ukraine. This is also not expected, at least in the short term, as war is very unpopular among the Belarusian population and according to some information also among the Belarusian military forces. If Russia were to insist on this, it could provoke instability in Belarus, and Russia would be forced to intervene. Russia cannot afford to do that at the moment because of the war in Ukraine. The two countries will continue to work together, but the annexation of Belarus will not take place in the next two years. Belarus' relations with the West will remain poor and sanctions will remain in place in the medium term. In addition to the above, the political risk is heightened by poor indicators on the effectiveness of institutions, corruption, media freedom and respect for human rights.

Furthermore, the CMSR assesses the medium-term economic and financial risk as very high as well. We do not expect structural reforms or privatisation, on the contrary, the role of the state in the economy will increase. All efforts will be directed towards implementing measures for political, economic and financial integration with Russia. GDP growth will remain positive in the medium term, however it will gradually decline, depending mainly on trade with Russia. Belarus will thus remain highly exposed to external shocks. Fiscal policy will remain expansionary until after the presidential elections next year, and monetary policy will thus have to remain restrictive. External debt is declining due to the lack of access to international financial markets, and the country is mainly dependent on Russian loans.

Bilateral cooperation between Slovenia and Belarus will continue to be limited mainly to trade in non-sanctioned products, and there will be no Slovenian direct investment in Belarus.

Belarus Medium-Term Country Risk Assessment can be ordered at: 

More information: darja.zlogar@cmsr.si