EDB expects Belarusian 2012 current account deficit of 1%-1% of GDP
MINSK. Nov 13 (Interfax) - The Eurasian Development Bank (EDB) predicts a current account deficit for Belarus this year of 1%-5% of GDP considering the imposition by Russia on the delivery of hydrocarbons, the quarterly issue of CIS Macromonitor prepared by the EDB says.
"It can be expected that the current account [Belarus] will have a deficit of 1%-5% of GDP for 2012. Such a result will be progress compared to 2010 and 2011, when that figure was 15% and 10.5% of GDP, respectively," the report says.
In the second quarter of this year, Belarus's current account surplus grew to $879.6 million (5.9% of GDP) from $40 million (0.3% of GDP) in the first quarter, when it moved into the plus column for the first time since the beginning of 2006. However, during the third quarter, "there were changes in Belarus that indicate an increasing danger of deterioration of the economy's outward robustness, of the price of great efforts reestablished at the end of 2011 - beginning of 2012." The experts explain that in July-August the balance of the foreign trade in goods, on a positive plane during the first half and reaching $430 million by the end of June, decreased to $23 million in July and to minus $386 million in August. "This movement was partially seasonal in nature, partially attributable to the introduction during that period of restrictions on the supply of crude for oil-refining on beneficial terms from Russia," the report says.
The authors say, "A persistent negative account balance means that the task of the outwardly consolidation of the Belarusian economy is not complete, and it remains vulnerable in relation to the effect of shocks from without and within."
The EDB experts are convinced that the restriction of oil-product shipments from Russia in the second half of this year "are leading to a further drop in the rate of economic growth for the remaining part of the year." The authors point out that "the country's authorities have set themselves the task of accelerating GDP growth next year to 8.5%, which is higher than average for this figure in the past decade (7.4%)."
Furthermore, the EDB experts point to strengthening of lending activity in Belarus amid plans for a lowering of the refinancing rate to 25%-26% by the end of 2012 and to 13%-15% by the end of next year. "To all appearances, the authorities' attention has shifted from measures for stabilizing the economic situation in the country after the events of 2011 to the stimulation of economic growth. In this context, the tasks are easing National Bank policy and increasing lending to the economy. Further movement in this direction is planned for next year," the report's authors say. In their view, the outcome of such policy will be "increasing negative risks to economic stability" in conditions of a weak balance of payments and limited opportunities for the country to raise financing abroad.
The EDB is an international financial organization founded by Russia and Kazakhstan in January 2006 to promote the development of its participants' market economies, as well as to expand trade ties. Its charter capital tops $1.5 billion. Russia, Kazakhstan, Armenia, Tajikistan and Belarus are members of the EDB.
