{
  "title": "Press Release: IMF Executive Board Approves US$2.46 Billion Stand-By Arrangement for Belarus",
  "publication": "IMF News, January 12, 2009",
  "sourceUrl": "https://www.imf.org/en/news/articles/2015/09/14/01/49/pr0905",
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  "summary": "Date: January 12, 2009.",
  "publishDate": "2009-01-12",
  "sections": [
    {
      "heading": "Overview",
      "content": "- Date: January 12, 2009.\n- The Executive Board approved a 15-month SDR 1.62 billion (about US$2.46 billion) Stand-By Arrangement for Belarus to support adjustment to external shocks.\n- An amount equivalent to SDR 517.8 million (about US$787.9 million) is available immediately; the remainder will be phased thereafter, subject to quarterly reviews.\n- The Stand-By Arrangement entails exceptional access to IMF resources, amounting to 418.8 percent of Belarus's quota.\n- Belarus joined the IMF on July 10, 1992; its quota is SDR 386.4 million (about US$588.0 million).\n- Belarus's latest prior arrangement with the IMF was a Stand-By Arrangement that expired on September 11, 1996."
    },
    {
      "heading": "Program objectives and terms",
      "content": "- Main objectives:\n  - Facilitate an orderly adjustment to external shocks.\n  - Address pressing vulnerabilities through macroeconomic adjustment measures and structural reforms.\n- Immediate financing available: SDR 517.8 million (about US$787.9 million).\n- Exceptional access: 418.8 percent of quota."
    },
    {
      "heading": "Key messages from Mr. Takatoshi Kato, Deputy Managing Director and Acting Chairman",
      "content": "- \"Belarus is experiencing serious economic problems.\"\n- External vulnerabilities have been exposed by adverse terms of trade movements, falling demand from trading partners, and difficulties in securing external finance, leading to a decline in international reserves.\n- In the face of these shocks the economy is likely to slow in 2009.\n- Authorities have adjusted the exchange rate and put in place tight fiscal and wage policies; measures already taken and announced are strong and, with resolute implementation, will be sufficient to restore stability.\n- Planned structural reforms in key areas should help return the economy to a higher growth path by 2010-11.\n- Exchange rate adjustment:\n  - Adjustment of the exchange rate parity will help restore competitiveness and address external imbalances.\n  - Adoption of a new currency basket and wider band will leave the economy better able to adapt to external shocks.\n  - Increase in interest rates that preceded the shift in the exchange rate regime, and subsequent further upward adjustment, will help support the new exchange rate regime.\n- Fiscal policy:\n  - Fiscal tightening will help bring demand into line with external financing constraints.\n  - Key measures include planned reduction in directed lending, observance of the target of a balanced central government budget balance, and maintenance of a prudent wage policy in the broader public sector.\n  - Authorities plan to review the social safety net, in cooperation with the World Bank, to ensure protection for the most vulnerable against the downturn and utility tariff increases.\n- Structural reform priorities:\n  - Price and wage liberalization should follow the realignment of the currency.\n  - Broader measures to support private sector development include reductions in the size of government, deregulation, and privatization, to be undertaken as fast as market conditions allow.\n- Financial sector:\n  - Structural reform in the financial sector is an important priority.\n  - Authorities enacted a blanket deposit guarantee, but the framework for financial sector liquidity and solvency support still needs refinement.\n  - Purging the banking system of directed lending is crucial to improve incentives, manage risks, and strengthen banks' capital positions.\n- Conclusion: The authorities have developed a strong macroeconomic program; their actions merit substantial Fund support and give confidence in a speedy return to stability and prospects for resumption of rapid growth if reforms are followed through."
    },
    {
      "heading": "Recent economic developments",
      "content": "- Growth record and drivers:\n  - GDP averaged close to 9 percent since 2002, with spare capacity and high investment underpinning production growth.\n  - Sharp export price gains, strong growth in trading partners, and large energy subsidies from Russia supported demand.\n- Overheating and inflation:\n  - Economy has been overheating.\n  - Inflation rose from a 2006 low of 7 percent to currently 16 percent (as of the press release).\n  - Rise in inflation partly due to global food and energy shocks; domestic indicators—high credit growth, output growth above trend—point to overheating.\n- External vulnerabilities:\n  - International reserves remained low during the boom.\n  - Some Russian energy prices were unwound.\n  - Exports to Western markets remained concentrated on oil products; higher value-added exports were mostly to the Commonwealth of Independent States (CIS).\n  - Credit risks from foreign exchange borrowing and funding exposure to the global banking system increased.\n  - Recent global developments exposed these vulnerabilities; the currency peg to the U.S. dollar came under pressure toward the end of 2008."
    },
    {
      "heading": "Program summary and key features",
      "content": "- Program goal: Facilitate adjustment to external shocks, reduce vulnerabilities, and implement structural reforms critical to mitigating vulnerabilities.\n- Growth and inflation outlook:\n  - A sharp economic slowdown is forecast for 2009, with GDP projected to grow at 1-2 percent, after reaching 10.5 percent in 2008.\n  - Inflation is projected to slow to 11.5 percent in 2009.\n- Key features:\n  - Implementation of a new exchange rate regime:\n    - Devaluation to a new dollar parity and simultaneous switch to a currency basket that better reflects Belarus's trade and financial flows.\n    - Both measures implemented on January 1, 2009.\n  - Tight fiscal stance to contain domestic demand growth:\n    - Fiscal tightening aimed at slowing investment and consumption.\n    - Wage growth will slow in the budget and state enterprise sectors in 2009.\n    - Public investment will be restrained.\n    - Selected subsidies will be curtailed, while the social safety net will be strengthened to protect the most vulnerable.\n  - Structural policies emphasizing economic liberalization:\n    - Priority on price liberalization.\n    - Efforts to enhance private sector role by reducing tax distortions and regulatory burdens, and continuing privatization efforts."
    },
    {
      "heading": "Selected economic indicators, 2005-10 (annual percentage change, unless otherwise specified)",
      "content": "- Real GDP:\n  - 2005: 9.4\n  - 2006: 10.0\n  - 2007: 8.2\n  - 2008: 10.5\n  - 2009: 1.4\n  - 2010: 2.3\n- Total domestic demand:\n  - 2005: 11.0\n  - 2006: 13.9\n  - 2007: 12.8\n  - 2008: 14.3\n  - 2009: -2.2\n  - 2010: 1.3\n- Consumption:\n  - 2005: 10.1\n  - 2006: 9.0\n  - 2007: 9.7\n  - 2008: 10.7\n  - 2009: -0.7\n  - 2010: (not listed)\n- Private consumption:\n  - 2005: 15.0\n  - 2006: 13.0\n  - 2007: 13.3\n  - 2008: 14.0\n  - 2009: -1.0\n  - 2010: 1.5\n- Public consumption:\n  - 2005: 0.4\n  - 2006: -0.2\n  - 2007: 0.5\n  - 2008: 1.2\n  - 2009: 0.0\n  - 2010: 1.0\n- Investment:\n  - 2005: 26.2\n  - 2006: 19.5\n  - 2007: 21.4\n  - 2008: -4.9\n  - 2009: (not listed)\n  - 2010: (not listed)\n- Of which: fixed:\n  - 2005: 26.5\n  - 2006: 19.7\n  - 2007: 20.8\n  - 2008: -5.0\n- Net exports (contribution to growth):\n  - 2005: 0.1\n  - 2006: -7.9\n  - 2007: -0.8\n  - 2008: -6.9\n  - 2009: 3.9\n  - 2010: 0.9\n- Consumer prices, end of period:\n  - 2005: 7.9\n  - 2006: 6.6\n  - 2007: 12.1\n  - 2008: 13.7\n  - 2009: 11.5\n  - 2010: 8.0\n- Consumer prices, average:\n  - 2005: 10.3\n  - 2006: 7.0\n  - 2007: 8.4\n  - 2008: 14.9\n  - 2009: 15.7\n  - 2010: 6.1"
    },
    {
      "heading": "External debt and balance of payments (in percent of GDP unless otherwise specified)",
      "content": "- Current account:\n  - 2005: -3.9\n  - 2006: -6.8\n  - 2007: -7.6\n  - 2008: -5.4\n  - 2009: -3.6\n  - 2010: (not listed)\n- Trade balance:\n  - 2005: -1.7\n  - 2006: -6.1\n  - 2007: -9.1\n  - 2008: -9.6\n  - 2009: -8.6\n  - 2010: -7.4\n- Exports of goods:\n  - 2005: 53.3\n  - 2006: 53.7\n  - 2007: 54.3\n  - 2008: 57.2\n  - 2009: 52.5\n  - 2010: 54.1\n- Imports of goods:\n  - 2005: -55.0\n  - 2006: -59.8\n  - 2007: -63.4\n  - 2008: -66.8\n  - 2009: -61.2\n  - 2010: -61.5\n- Gross external debt:\n  - 2005: 17.0\n  - 2006: 18.5\n  - 2007: 28.0\n  - 2008: 25.3\n  - 2009: 32.4\n  - 2010: 33.9\n- Public (gross consolidated debt of the public sector):\n  - 2005: 2.6\n  - 2006: 5.9\n  - 2007: 11.8\n  - 2008: 13.1\n- Private (banks and state-owned enterprises):\n  - 2005: 14.4\n  - 2006: 16.3\n  - 2007: 21.5\n  - 2008: 19.4\n  - 2009: 20.6\n  - 2010: (not listed)"
    },
    {
      "heading": "Savings and investment",
      "content": "- Gross domestic investment:\n  - 2005: 28.5\n  - 2006: 32.2\n  - 2007: 33.2\n  - 2008: 36.2\n  - 2009: 32.9\n  - 2010: 32.8\n- (Other lines with values presented in the table:)\n  - 9.6\n  - 8.6\n  - 11.2\n  - 9.5\n  - 19.1\n  - 22.6\n  - 24.6\n  - 25.1\n  - 24.9\n  - 23.3\n- National saving:\n  - 2005: 29.9\n  - 2006: 28.3\n  - 2007: 26.4\n  - 2008: 28.7\n  - 2009: 27.4\n  - 2010: 29.2\n- (Other lines with values presented in the table:)\n  - -0.5\n  - 0.3\n  - 30.6\n  - 26.8\n  - 25.9\n  - 29.1\n  - 27.2"
    },
    {
      "heading": "Public sector finance",
      "content": "- Central government balance:\n  - 2005: -0.6\n- General government balance:\n  - (value not listed)\n- Revenue:\n  - 2005: 47.4\n  - 2006: 49.1\n  - 2007: 50.0\n  - 2008: 52.2\n  - 2009: 48.9\n  - 2010: 48.5\n- Expenditure:\n  - 2005: 48.0\n  - 2006: 47.6\n  - 2007: 49.6\n  - 2008: 52.7\n  - 2009: 48.6\n  - 2010: 49.2\n- Of which, wages and subsidies and transfers (partial series shown):\n  - Wages: 8.1, 6.9, 6.4 (years not explicitly aligned in the table)\n  - Subsidies and transfers: 10.6, 8.8"
    },
    {
      "heading": "Terms of trade and exchange rate indicators",
      "content": "- Terms of Trade:\n  - 2005: 12.3\n  - 2006: -2.5\n  - 2007: 8.7\n  - 2008: -3.5\n  - 2009: 1.6\n- Real Effective Exchange Rate:\n  - 2005: -0.1\n  - 2006: -2.0\n  - 2007: -4.4\n  - 2008: -1.1\n  - 2009: -4.8"
    },
    {
      "heading": "Official reserves and coverage indicators",
      "content": "- Official reserves (millions of U.S. dollars):\n  - 2005: 1,297\n  - 2006: 1,383\n  - 2007: 4,182\n  - 2008: 2,865\n  - 2009: 5,204\n  - 2010: 8,085\n- Official reserves (months of imports of goods and services):\n  - 2005: 0.7\n  - 2006: 0.8\n  - 2007: 1.7\n- Official reserves (percent of short-term debt):\n  - 2005: 39.3\n  - 2006: 31.6\n  - 2007: 56.8\n  - 2008: 33.5\n  - 2009: 62.2\n  - 2010: 91.5\n\nSource: Press Release No. 09/05, IMF. The table and narrative reflect Belarusian authorities' data and IMF staff estimates as presented in the press release.\n\n---\n\n Content in this bundle\n\n- Pr0905rpdf (PDF){rel=\"external\" type=\"application/pdf\"}\n\n---\n\n References\n\n- Republic of Belarus and the IMF\n- Press Releases\n- PRESS CENTER\n- https://www.imf.org/en/home\n\nSource: https://www.imf.org/en/news/articles/2015/09/14/01/49/pr0905"
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    "Published: January 12, 2009",
    "Date: January 12, 2009.",
    "The Executive Board approved a 15-month SDR 1.62 billion (about US$2.46 billion) Stand-By Arrangement for Belarus to support adjustment to external shocks.",
    "An amount equivalent to SDR 517.8 million (about US$787.9 million) is available immediately; the remainder will be phased thereafter, subject to quarterly reviews.",
    "The Stand-By Arrangement entails exceptional access to IMF resources, amounting to 418.8 percent of Belarus's quota.",
    "Belarus joined the IMF on July 10, 1992; its quota is SDR 386.4 million (about US$588.0 million).",
    "Belarus's latest prior arrangement with the IMF was a Stand-By Arrangement that expired on September 11, 1996.",
    "Main objectives:",
    "Immediate financing available: SDR 517.8 million (about US$787.9 million).",
    "Exceptional access: 418.8 percent of quota.",
    "\"Belarus is experiencing serious economic problems.\"",
    "External vulnerabilities have been exposed by adverse terms of trade movements, falling demand from trading partners, and difficulties in securing external finance, leading to a decline in international reserves.",
    "In the face of these shocks the economy is likely to slow in 2009.",
    "Authorities have adjusted the exchange rate and put in place tight fiscal and wage policies; measures already taken and announced are strong and, with resolute implementation, will be sufficient to restore stability.",
    "Planned structural reforms in key areas should help return the economy to a higher growth path by 2010-11.",
    "Exchange rate adjustment:",
    "Fiscal policy:",
    "Structural reform priorities:",
    "Financial sector:",
    "Conclusion: The authorities have developed a strong macroeconomic program; their actions merit substantial Fund support and give confidence in a speedy return to stability and prospects for resumption of rapid growth if reforms are followed through.",
    "Growth record and drivers:",
    "Overheating and inflation:",
    "External vulnerabilities:",
    "Program goal: Facilitate adjustment to external shocks, reduce vulnerabilities, and implement structural reforms critical to mitigating vulnerabilities.",
    "Growth and inflation outlook:",
    "Key features:",
    "Real GDP:",
    "Total domestic demand:",
    "Consumption:",
    "Private consumption:",
    "Public consumption:",
    "Investment:",
    "Of which: fixed:",
    "Net exports (contribution to growth):",
    "Consumer prices, end of period:",
    "Consumer prices, average:",
    "Current account:",
    "Trade balance:",
    "Exports of goods:",
    "Imports of goods:",
    "Gross external debt:",
    "Public (gross consolidated debt of the public sector):",
    "Private (banks and state-owned enterprises):",
    "Gross domestic investment:",
    "(Other lines with values presented in the table:)",
    "National saving:",
    "(Other lines with values presented in the table:)",
    "Central government balance:",
    "General government balance:",
    "Revenue:",
    "Expenditure:",
    "Of which, wages and subsidies and transfers (partial series shown):",
    "Terms of Trade:",
    "Real Effective Exchange Rate:",
    "Official reserves (millions of U.S. dollars):",
    "Official reserves (months of imports of goods and services):",
    "Official reserves (percent of short-term debt):",
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    "[Press Releases](https://www.imf.org/en/news/searchnews)",
    "[PRESS CENTER](http://presscenter.imf.org/)",
    "[https://www.imf.org/en/home](https://www.imf.org/en/home)"
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