The economy of Belarus is still deep in recession but the situation is stabilizing and the IMF expects a mild 0.6% growth to resume in 2017. Industrial production growth remains in the red and unemployment is creeping up, albeit from a low base . Consumption is expected to decline as although nominal wages have risen in the last years, the government has ignored the inflationary impact of hiking wages and almost all the gains have been inflated away. At the same time investment in the dumps but since the boom years the government has been investing heavily . In recent years this investment has been financed by foreign borrowing rather than funds drawn from the economic rents drawn from subsidised cheap Russian energy imports. Many of Belarus problem derive from the problems in Russia which has been implicitly supporting the Belarusian economy for two decades to keep it on board as a political ally. But Russia can no longer afford this largess and has been reducing its support. This has two impacts on Belarus: to make it look for a diversified partner base and cast its net increasingly further afield - specifically it has been courting China. Secondly, the growing economic pain has spurred the government into attempting some real reforms, albethem limited to improving the efficiency of the state spending programme rather than go for true liberal economic reform, which nevertheless may result in some significant gains.