EDB: IT sector down 10 percent in 2022

December 19, BPN. The Belarusian IT sector’s decline accelerated to 10 percent year on year in the period from January to November, the Eurasian Development Bank (EDB) said in its recent weekly macroeconomic report.

Investment activity remained low amid the uncertainty, with capital expenditures falling by 25.3 percent, while investments in machinery, equipment and vehicles plunged by 42.2 percent, the EDB analysts noted.

Meanwhile, the manufacturing industry’s decline slowed down as the economy started adapting to new conditions, the report said.

Recession in the Belarusian IT sector was expected since 2020 when companies started relocating staff from Belarus amid the political crisis and a government crackdown on the opposition. Politically-motivated persecution affected many IT professionals, said Leŭ Lvoŭski, an expert at the Belarusian Economic Research and Outreach Center (BEROC).

Western sanctions against Belarus also played a role, increasing economic and reputational risks for companies from Europe and the United States, BEROC expert Anastasija Łuzhina told BPN.

IT companies had even more reasons to leave Belarus after the outbreak of Russia’s war on Ukraine, amid fears of a possible call-up of IT workers for military duty and even more complicated relations with international clients, investors and partners.

They had problem attracting investment, while companies with international profiles feared for their reputation, Lvoŭski said. He also noted technical issues with money transfers.