IMF to take preliminary stock
Preliminary assessment by the IMF experts of the implemented and projected arrangements of the Belarusian economic policy, looks little promising. Most likely, at this stage talks about a new IMF loan to Belarus will end in vain.
The International Monetary Fund (IMF) mission is expected to arrive in Belarus in the second half of February. The IMF Resident Representative in Belarus Natalia Koliadina said, the IMF mission will revise Belarus’ macroeconomic forecast for 2012 and the following five years, review the recent economic policies and analyze economic policy arrangements for 2012.
The IMF permanent representative in Belarus Natalia Koliadina said that the IMF experts could not discover sources that would allow Belarus to increase its GDP by 5.5% in 2012. Mrs. Koliadina also expressed concern about attempts of the authorities to resume administrative control of the economy.
The IMF Resident Representative referred to tightening of the monetary and fiscal policies as positive measures implemented by the Belarusian authorities. According to the IMF, “for the first time one of the main objectives of the monetary policy is to reduce inflation”. However, unjustified increases of incomes for the population, without proper adjustment with the level of production growth, could result in the unwinding of the inflationary spiral. Mrs. Koliadina also pointed out that funding of state programmes via commercial banks still continued, regardless of the creation of the Development bank, which funded the majority of the programmes.
Mrs. Koliadina refrained from comments on the negotiation process for a new loan to Belarus. “I have no new information about the intentions of the Belarusian authorities in this regard”, she said. In 2009-2010 the IMF Stand-by programme was implemented in Belarus, when it received a USD 3.6 billion loan. In December 2011 Alexander Lukashenko said he would not oppose to having a new loan from the IMF in the amount of USD 2.5 -5 billion.
The country's leadership has instructed the local authorities to raise minimum wages at enterprises by the end of 2019 to BYN 1,000, which would lead to an increase in the average wage in the economy as a whole to BYN 1 500. The pace of wage growth in 2017 is insufficient to ensure payroll at BYN 1000 by late 2017 without manipulating statistical indicators. In order to fulfil the president’s order, the government would have to increase budgetary expenditures on wages in healthcare and education, enterprises – to carry out further layoffs and expand the practice of taking loans to pay wages and restrict investment in modernisation of fixed assets. In 2010, the artificial increase in wages led to a threefold devaluation in 2011, an increase in the average salary to BYN 1500 will not match the capabilities of the economy and would lead to yet another devaluation.