Business news

MINSK, 16 October (BelTA) – A team of experts of the Eurasian Development Bank (EDB), which manages assets of the Eurasian Fund for Stabilization and Development (EFSD), visited Minsk on 2-5 October for program monitoring and consultations on amending the Belarusian government’s reform program backed by an EFSD loan with a focus on the final seventh tranche of the loan, BelTA has learned.

While in Minsk the EDB experts met with Belarusian Finance Minister Maksim Yermolovich, Deputy Chairman of the Board of the National Bank of the Republic of Belarus (NBRB) Dmitry Kalechits, top officials and specialists of the ministries and government agencies involved, representatives of international financial institutions, and independent experts.

Consultations between Belarusian authorities and the EDB experts resulted in a preliminary list of tweaks and addenda to the reform program backed by the EFSD loan with a focus on the seventh tranche.

The measures need to be adjusted because the deadline for evaluating Belarus’ compliance with terms of the tranche has been moved from 1 January 2018 to 1 December 2018. The tweaks also reflect the need to bear in mind current and expected macroeconomic trends and detected risks.

The final list of the adjusted measures of the tranche will be forwarded for consideration of the EFSD Council.

According to the EDB, inflation in Belarus has not exceeded 6% per annum since H2 2017. The result is attributed to favorable external conditions, a moderate fiscal policy, and tough monetary management terms. However, since consumer demand is excessive and inflation expectations are on the rise, core inflation and headline inflation have been accelerating since August 2018. Yet it is highly probable this year’s inflation will stay within the 6% margin set by Belarus’ central bank.

According to the EDB, Belarus still faces short-term and medium-term risks despite the favorable economic situation at present.

The cost of new borrowings exceeds the predicted medium-term economic growth rate. Because of that debt stability, load on the state budget, and the balance of payments in the medium term is threatened. The considerable debt burden of state-run Belarusian enterprises represents another risk factor.

BelTA reported earlier that the Eurasian Development Bank transferred the sixth tranche of the EFSD’s $2 billion loan to Belarus in October. As much as $200 million was transferred, bringing the total sum Belarus has received as an incentive to implement the reform program to $1.8 billion. The seventh tranche will be the final tranche of the loan.