Causes and Features of Economic Downturn in Belarus: the Role of Structural Factors

This work is devoted to the analysis of output downturn in Belarus in 2015. It is shown that economic downturn is not the consequence of only cyclical hesitations, but also of structural compression. Moreover, the structural component of recession in 2016 began to dominate. Downturn became the natural continuation of the long-run tendency of growth attenuation as the result of decrease in productivity. Furthermore, key cause of productivity decrease is endogenous mechanisms of "efficient production repression". External exogenous shocks in 2014-2015 only increased the tendency of productivity decrease speeding up and deepening inevitable structural downturn. In 2015-2016 economic adaptation to productivity decrease was only partial. Broader set of adaptational responses may take place in the future pointing out the protracted nature and the aggravation of the downturn. From economic policy perspective the structural nature of the recession means that "automatic" exit from crisis due to business cycle phase will not happen. In addition, standard tools of economic policy can not effect structural component of the downturn. Thus, measures for stimulating of long-run growth should become the priority of economic policy. The lack of such measures and/or postponing of this measures can lead not only to losses in long-run growth, but will generate losses in the short run.