Belarus will not see a repeat of crisis - minister
MINSK. Oct 24 (Interfax) - Belarusian Economy Minister Nikolai Snopkov does not think Belarus will see a repeat of the systemic crisis it experienced in 2011, despite a downturn in the country's balance of payments.
"Our balance of payments is, of course, at a minus, and the outlook is, naturally, pessimistic. The possibility of a repeat of the crisis exists, but it will not happen," he told the press in Minsk.
The current account balance of payments deficit continues to grow, he said. However, the country plans to cover this deficit with direct foreign investment and domestic borrowing, he said. Among these sources, Snopkov spoke about the last tranche of a EurAsEC Anti-Crisis Fund loan, revenue from Belarusian Eurobonds, and direct foreign investment, which should reach $2.5 billion by the end of the year. Another source that will be used to cover the deficit will be re-investment of company revenue.
Snopkov said the government downgraded the macro-forecast for 2014 based on an adjusted evaluation of the economy in 2013. "This is a conservative version and it is possible that we will get the chance to speed up economic growth next year," the minister said.
Foreign factors could improve in 2014. Taking into account these circumstances, the forecast for 2014 could be improved, he said.
The practice of large-scale stimulation of domestic demand through emissions led Belarus to the currency and financial crisis of 2011 and a huge Belarusian ruble devaluation, which amid government regulation of prices led to inflation of 108.7%.
The World Bank said this week that it was concerned that the economic crisis could be repeated in Belarus, if the government is not consistent in its structural reform measures. "We are observing that structural reforms have been put off for too long in Belarus and various problems have accumulated at the same time. If there is an entire range of structural reforms, and you only work with monetary-financing policy, you may get the same problems as in 2011," World Bank Country Director for Ukraine, Belarus and Moldova Qimiao Fa said at a briefing.
"Our concern is that if the government continues to expand crediting and increase salaries, despite productivity, the imbalance will increase. This is very worrying," he said.
"It is difficult to believe that you will adhere to reforms while keeping foreign imbalances and the forecast GDP growth of 8.5%," he said.
The World Bank's new overview of the Belarusian economy says GDP growth will not exceed 1% in 2013 and will be 1.5% in 2014.
The current account balance of payments deficit in January-July 2013 was $3.61 billion, compared to a surplus of $987.4 million in the same period of 2012.
The Belarusian Economy Ministry this week lowered its GDP growth forecast for 2014 to 2.4% from 5.7%. GDP grew 1.5% in 2012, amid a target forecast of 5%-5.5%.