IMF Report 2014 – Belarus
After two crises in four years, growth has slowed amid bouts of external pressures. Following average annual GDP growth of 8% during 1997–2008, in the aftermath of the 2008 and 2011 crises growth reached only 1.7%in 2012 and 0.9% in 2013 reflecting structural limitations of the economy and a weak external environment. Repeated attempts by the authorities to boost activity through domestic policy stimulus, while delaying much-needed structural reform, have resulted in rapidly rising external imbalances and recurrent bouts of exchange rate pressures, which have in turn given rise to frequent, though modest, policy shifts in short-term efforts to maintain stability.
High external financing needs and dwindling buffers leave Belarus highly dependent on external financial support. Without more decisive policy changes to reduce imbalances, and with another year of large external payments ahead, Belarus is highly dependent on external support. Russia has promised $2 billion in loans, but modalities for this support are still being worked out and at the time of this report only $450 million has been disbursed. Meanwhile, the decision on the final $440 million tranche under the program with the Anti Crisis Fund (ACF) of the Eurasian Community has been suspended until the second half of 2014 because of noncompliance with program conditionality. Lack of progress on policies also continues to prevent discussions on a Fund program.