2014年-IMF国际货币组织全球_Republic_of_Belarus_Fifth_Post_63页_997kb

Summary of Fifth Post-Program Monitoring Discussions with the Republic of Belarus (January 2014)

Core Content

The Fifth Post-Program Monitoring (PPM) Discussions with the Republic of Belarus, held in October 2013 and finalized in November 2013, focused on addressing economic challenges and implementing necessary policy adjustments to stabilize the economy and improve long-term growth prospects. The discussions were followed by a Staff Report, an Informational Annex, a Press Release, and a Statement by the Executive Director, all of which were made available to the public after removing market-sensitive information.

Key Issues

• Current Account Deterioration: The current account balance has worsened significantly, reaching a deficit of 9.5 percent of GDP in the first half of 2013. This is attributed to high domestic demand, weak export growth, and declining competitiveness.
• Reserve Levels: Reserves have fallen by about US$1.2 billion since the start of the year, reaching US$6.8 billion—equivalent to 1.7 months of imports.
• Banking Sector Risks: FX lending growth remains high, with 48 percent of total loans denominated in foreign currency by September 2013. Capital adequacy ratios have dropped to 19 percent, the lowest since 2011, raising concerns about financial stability.
• Fiscal Deficit: The headline fiscal deficit is expected to reach 0.5 percent of GDP in 2013, exceeding the original balanced budget target. This is due to revenue shortfalls and increased expenditure under government lending programs.
• Inflation: Inflation has rebounded to double digits, reaching 14.5 percent (y-o-y) by end-2013, surpassing the 12 percent target.
• Policy Uncertainty: While a new joint action plan was agreed upon, its implementation remains uncertain. The plan includes partial privatizations, tariff reforms, and a phase-out of price controls, but lacks the depth and urgency needed for sustainable reform.

Policy Recommendations

• Fiscal Policy:

  • No further wage increases in 2013–14 to curb demand and restore competitiveness.
  • Sharp reduction in directed lending to limit credit growth and contingent liabilities.
  • Correction of fiscal deficit through measures like raising cost recovery on energy and transport tariffs, cutting interest rate subsidies, and managing wage bill savings.
  • Balanced budget for 2014 is supported, provided directed lending is controlled.

• Monetary Policy:

  • Reduce foreign exchange interventions to allow for necessary rubel depreciation.
  • Tighten monetary policy to manage inflation and prevent disorderly exchange rate adjustment.
  • Move to base money targeting as an alternative to inflation targeting, given the current need for exchange rate flexibility.

• Banking Sector Policies:

  • Monitor FX lending growth closely and continue prudential measures to reduce exposure.
  • Limit FX deposit instruments that could increase exchange rate risk for the banking sector.
  • Improve liquidity management and interbank market functioning.

• Structural Policies:

  • Deep structural reforms are essential to increase efficiency and competitiveness.
  • Comprehensive privatization and enterprise restructuring should be accelerated.
  • Progressive lifting of price controls and increased autonomy for companies are needed.
  • Strengthen social safety nets to protect vulnerable groups during the transition.

Outlook and Risks

• Short-term Outlook: Growth is expected to remain weak, with GDP projected at 1.5 percent in 2013 and below that in subsequent years. Inflation is forecast to remain above 10 percent, exceeding the target.
• Balance of Payments: The current account deficit is expected to persist, and without significant external financing, the economy may face a forced adjustment.
• Downside Risks:
  • Further deterioration in the current account due to additional policy stimulus or loss of competitiveness.
  • Financial account risks from reduced capital inflows due to increased external vulnerabilities.
  • Banking sector risks from high FX lending and potential NPL increases.
• Upside Risks: New bilateral financial agreements could help mitigate short-term pressures.

Capacity to Repay and Fund Relations

• Repayment Challenges: External debt service is high, with repayments to the IMF expected at US$1.6 billion in 2013 and US$1.4 billion in 2014. This, combined with a deteriorating current account and low reserves, poses serious risks.
• Financing Sources: The main source of financing is expected to be new bilateral agreements, particularly with Russia and China, although no concrete agreements have been reached.
• IMF Support: A new Fund-supported program requires a credible commitment to strong macroeconomic policies and structural reforms to achieve external rebalancing and sustainable growth.

Implementation and Institutional Support

• The mission team included representatives from the IMF's EUR, FAD, MCM, and SPR departments, with support from the Minsk office and other officials.
• The authorities acknowledged the need for exchange rate flexibility but preferred a gradual depreciation to avoid market instability.
• They expressed support for the joint action plan but emphasized the need for a more gradual approach to reform, citing social stability concerns.

Conclusion

The discussions highlighted the urgent need for both short-term macroeconomic adjustments and long-term structural reforms to address external imbalances, inflation, and banking sector risks. The authorities are committed to improving the fiscal and monetary stance, but the effectiveness of these measures depends on their implementation and the credibility of the reform agenda. The IMF emphasized the importance of a comprehensive and front-loaded reform program to ensure sustainable economic growth and reduce external vulnerabilities.