The International Monetary Fund (IMF) says vulnerabilities of Belarus’ economy remain elevated. The IMF made a statement to this effect in the Staff Report prepared by a staff team of the IMF for the 2016 Article IV consultation.
“The economy is expected to contract further this year and next, reflecting still-weak balance sheets and structural impediments. A subdued recovery is expected as of 2018, while over the medium-term the potential growth would only increase to around 1.75%, limited by negative demographics and, in the absence of deeper structural reforms, low productivity growth. Inflation is expected to gradually fall to the high single digits over the next few years”.
“Key domestic risks to the outlook include the pace of implementation of the policy reform agenda and uncertainties about the size of quasi-fiscal liabilities. On the external side, key risks include persistently lower international energy prices or disruptions in energy price arrangements with Russia. Corporate and bank balance sheets and household confidence remain sensitive to any significant exchange rate movements, owing to high dollarization, currency mismatches, limited access to foreign exchange liquidity, and significant annual gross external financing requirements”.
The IMF has confirmed its forecast indicating that Belarus’ real GDP is expected to reduce by 3% in 2016 and by 0.5% in 2017. The IMF says Belarus’ annual inflation growth in December is expected to reach an estimated 13%, almost 1% higher than in 2015.
As previously reported, Belarus’ GDP reduced by 3% YoY in January-August to 60.8 billion Belarusian rubles ($31.21 billion at the central bank’s exchange rate). Belarus’s authorities expect a 0.3% GDP growth in 2016, with inflation forecast standing at 12%. (Prime-TASS/Business World Magazine)