Our View:

Throughout 2015 we expect Belarus to continue to align its security and economy with Russia, even though the former has begun deepening its diplomatic links with Western Europe. That said, the two countries are currently embroiled in a dispute over the break-up and a joint venture in the potash industry, although this seems to be having little effect regarding the two countries’ diplomatic relationship.

In 2014 we expect Belarus to spend USD821.9mn on defence. The country’s year-on-year (y-o-y) defence expenditure is set to increase markedly during our forecast period. In terms of percentage of gross domestic product, Belarus has spent an average of 1.3% of its GDP on defence up to and including 2014. We expect this proportion of defence expenditure to remain until 2019.