Belarus. News: socio-economic situation in May 2011
At the moment Belarus is experiencing some difficulties in the foreign exchangemarket. The main reason for their occurrence has been largely unfavorable confluence of objective and subjective factors, which resulted in the deterioration of the external position:
As part of the balance of payments - the growth of devaluation, which led to an increase in demand for foreign currency (domestic capital flight: some went to theimports, some remained in the hands of the population).
Understanding of government of growth of internal imbalances led to an adjustment of economic policy. This is confirmed by the fact that structural reforms in the country had begun prior to the start of problems in the foreign exchange market. Belarus has consistently pursued a policy of economic liberalization and increased private sector role in the economy. In this regard, the Directive was adopted by the President of the Republic of Belarus № 4 dated 31.12.2011, aimed at liberalizing the economy. As partof its implementation was signed by President of the Republic of Belarus of25.02.2011 № 72 "On some issues of regulation of prices (tariffs) in the Republic ofBelarus" aimed at substantially reducing state intervention in the pricing process.
In the deteriorating situation on the currency market to stabilize the situation, to preventa debt crisis similar to what happened in some EU countries, now the Government andNational Bank designed and implemented a package of measures aimed atmacroeconomic stabilization. Among other things, the stabilization measures include:
Embassy of the Republic of Belarus
- worsening terms of trade (rise in gas prices by 33 per cent);
- increase in imports of petroleum and petroleum products (2-fold and 6.7-fold, respectively);
- accumulated surplus of total demand as a result of loose monetary and fiscal policy in 2010, which was launched in 2011. Loose monetary policy continued during the first two months. Low rate of credit growth and the economy;
- the presence of high devaluation expectations of economic entities. Considering currency laws (targeted buying foreign currency), the company insure their currency risks through the purchase of goods (components, raw materials);
- increase in imports - 51%, and investment - an increase of imports of investment - 68%;
- the presence of devaluation of the population - increased demand for imported goods from the public (consumer imports grew by 62%);
- prospects for raising the customs duties on cars - used cars, import growth (an increase of more than 300 million U.S. dollars).
As part of the balance of payments - the growth of devaluation, which led to an increase in demand for foreign currency (domestic capital flight: some went to theimports, some remained in the hands of the population).
Understanding of government of growth of internal imbalances led to an adjustment of economic policy. This is confirmed by the fact that structural reforms in the country had begun prior to the start of problems in the foreign exchange market. Belarus has consistently pursued a policy of economic liberalization and increased private sector role in the economy. In this regard, the Directive was adopted by the President of the Republic of Belarus № 4 dated 31.12.2011, aimed at liberalizing the economy. As partof its implementation was signed by President of the Republic of Belarus of25.02.2011 № 72 "On some issues of regulation of prices (tariffs) in the Republic ofBelarus" aimed at substantially reducing state intervention in the pricing process.
In the deteriorating situation on the currency market to stabilize the situation, to preventa debt crisis similar to what happened in some EU countries, now the Government andNational Bank designed and implemented a package of measures aimed atmacroeconomic stabilization. Among other things, the stabilization measures include:
- abolition of exchange controls and access to a single course in all segments of the foreign exchange market;
- tightening of monetary policy and rising real interest rates, money market;
- optimization of the consolidated budget (budget deficit from 3% to 1.5% of GDP by the end of 2011);
- significant reduction in the quasi-fiscal financing of government programs;
Embassy of the Republic of Belarus
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