ABSTRACT
The recession in Russia in 2015 had a profound effect on the Belarusian economy. The Russian market is the main destination for Belarusian exports. We focus on the contribution of trade as a major shock transmission mechanism. We find that the decline in exports to Russia explains about two-thirds of the GDP drop in Belarus in 2015. Despite the decline in the Russian market, and the major devaluation of the Belarusian rouble, most Belarusian exporters failed to find new markets for their goods. We complement our macro-level analysis, based on trade data and national accounts, with industry-level case studies highlighting the key transmission mechanisms at play.
