Belarus unlikely to quickly restore pre-crisis rating - S&P
MINSK. Feb 28 (Interfax) - Belarus will not be able to quickly restore its pre-crisis rating considering the ongoing internal imbalances in the economy and unfavourable external situation, Standard & Poor's analyst Sergei Voronenko believes.
"Belarus' sovereign rating was downgraded by two rungs, from B+ to B-, from February 2011 through February 2012. Movement in the opposite direction will be much slower. One can't expect a quick rebound, because the situation in the economies of other countries is having a negative impact," Voronenko said Thursday at an international conference in Minsk on the Belarusian capital market.
In light of this, he indicated that a change in the country's sovereign rating should not be expected in the near future.
However, the country's rating was not downgraded to the speculative C level, so "at the moment we don't expect that any Belarusian banks will be on the verge of default, government support will in any case continue at least in the national currency, and Russian financial institutions will support their banks that operate in Belarus; we saw this in 2011-2012," Voronenko said.
He said the funding situation in the Belarusian economy this year will be similar to the situation in the second half of 2012. In other words, the external environment will remain unfavourable and economic growth will only be possible on the back of domestic demand.
In light of this, "we cannot yet make the conclusion that the fragile stability achieved by the authorities is of a firm nature," Voronenko said. Moreover, the Belarusian authorities' excessive efforts to achieve economic growth targets could upset this stability. However, he recalled that his agency's outlook for the sovereign rating is stable.
"In other words, we believe that the government will observe reasonable limits in stimulating domestic demand," Voronenko said.
Speaking about the outlook for the country's banking sector in 2013, he said "this is a year of great opportunity for external players - some of them will take advantage of the situation and one should expect a redistribution of bank assets on the Belarusian market in favour of foreign capital, foremost Russian."
Voronenko told Interfax that he believes it unlikely that there will be a change in Belarus' current sovereign rating, which S&P will review this spring.
