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Opinions & Interviews

25 Mar 2013

Belarus government ready to take measures to preserve macroeconomic stability

Belarus government ready to take measures to preserve macroeconomic stability

MINSK, 25 March (BelTA) – The Belarus government is ready to take measures to preserve macroeconomic stability. The statement was made by Mr David Hofman, head of the IMF mission in Belarus, on 25 March, BelTA has learned.

During the visit of the present IMF mission to Belarus meetings with several heads of Belarusian government agencies were held. “Meetings with representatives of the authorities created the impression that they fully realize the need to maintain and preserve the macroeconomic stability. And they absolutely clearly told us that they are ready to take the necessary toughening measures if threats to the macroeconomic stability emerge, if inflation falls slower than it should in order to reach the targeted 12%,” said David Hofman.

Yet the IMF mission was concerned about the rather intense GDP growth target – 108.5%. It contradicts the idea of reaching the inflation target. The IMF mission believes that it can put pressure on the exchange rate. “In this case the government will have to once again resort to toughening the way it was done in 2012. Therefore, the alternation of encouraging and restraining economic policy measures should be avoided,” said David Hofman. The mission advises the Belarus government to pursue a hardline, consistent, and predictable policy aimed at preserving and maintaining the economic stability.

Pricing liberalization, the bolstering of property rights, privatization, restructuring of state enterprises, the creation of a system for individual social benefits to protect the most vulnerable population strata remain the key priorities of the reforms, stressed David Hofman. In this context the bill on privatization needs revising, he believes.

The reforming of the financial sector remains important. The IMF suggests concentrating targeted lending in the Development Bank while other banks should operate on market terms, giving loans to the most viable companies and industries.

 

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