Republic of Belarus: Fifth Post-Program Monitoring Discussions

Publication Date: January 24, 2014
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Summary: KEY ISSUES Context: The current account is worsening, coinciding with peak debt service, limited market access, and low reserves. Although the authorities have taken ad hoc measures to curb acute exchange rate pressures during the summer, a stronger policy response is urgently needed to reduce external imbalances and mitigate risks. Challenges: Facilitating external adjustment through a consistent set of policies is the key short-term priority. The medium-term challenge remains to increase efficiency and competitiveness through deep structural reform, with strong measures taken up front to enhance credibility. Policy recommendations: No further wage increases in 2013–14, to curb demand and regain competitiveness; Sharply reduce directed lending, to limit credit growth and contingent liabilities, and reduce external imbalances; Substantially scale back foreign exchange market intervention and tighten monetary policy to facilitate exchange rate and balance of payments adjustment; Adopt comprehensive and ambitious structural reforms to raise sustainable growth
Series: Country Report No. 14/18
Subject(s): Post-program monitoring | Fiscal policy | Wage increases | Fiscal reforms | Monetary policy | Banking sector | Economic indicators | Debt sustainability analysis | Staff Reports | Press releases | Belarus

Notes Also Available in Russian
Publication Date: January 24, 2014
ISBN/ISSN: 9781484382592/1934-7685 Format: Paper
Stock No: 1BLREA2014001 Pages: 63
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