By Vitaly Volkov
“Belarus has avoided recession and restored economic growth, while receiving access to international capital markets via its placement of Eurobonds,” noted Chris Jarvis, the Head of the IMF Mission, announcing his assessment. The International Monetary Fund is impressed by the country’s steps to allow privatisation and welcomes Belarus’ initiatives ‘on further liberalisation of the economy and development of entrepreneurship, with the focus on small and medium-sized businesses’.
However, the IMF is calling on the Belarusian Government to reduce its spending on various state programmes. Its experts believe that considerable salary rises could lead to a budget deficit. Nevertheless, they admit that the recent increase ‘aimed to bring state salaries in line with those in the private sector’.
The financial deficit is being covered by the Government through foreign loans. Analysing this strategy, Mr. Jarvis asserted, “Belarus is a solvent country, with a low level of foreign debt compared to other states with developing market economies.” The IMF believes that the attraction of foreign loans is ‘absolutely feasible’ and calls the placement of Eurobonds ‘one of this year’s successes for Belarus’.
Several years ago, Belarus enjoyed high GDP growth without loans (although energy prices were different at that time). Our foreign debt is far from critical but it is better to be cautious regarding further loans. Approving the recent placement of Eurobonds, the IMF notes, “It’s vital that the country’s economic policy is strong, so that it does not solely rely on foreign borrowings.”