Belarus needs to speed up reforms, IMF says
The International Monetary Fund (IMF) believes that Belarus needs to speed up deep reforms targeting the state-owned enterprise (SOE) sector, Peter Dohlman, head of the IMF mission to Belarus, told reporters in Minsk on Thursday.
He led a team of IMF experts that held the annual Article IV Consultation with the Belarusian government for two weeks.
Mr. Dohlman said that Belarus was expected to see 1.7-percent economic growth this year, and economic growth was projected to increase to two percent over the medium term.
Mr. Dohlman attributed the current economic recovery to a more favorable external environment and the government's stabilization policies.
The expert said that the government had managed to stabilize the rubel's exchange rate and reduce annual inflation to an all-time low, but the measures were not enough for securing a faster pace of economic growth.
The Belarusian economy remains vulnerable as its SOE sector is still unreformed and many state-owned enterprises rely on government aid, said Mr. Dohlman.
The IMF recommends that the Belarusian authorities take certain steps toward structural reforms as their fiscal and monetary policies cannot eliminate the structural factors restricting economic growth, he noted, adding that the government needed to implement deep reforms at a faster pace and create conditions for the private sector's fast development.
Belarus' medium-term economic growth is not expected to surpass two percent if the country takes no additional steps toward reforming the SOE sector, Mr. Dohlman warned. If Belarus carries out the measures recommended by the IMF, it may see economic growth of four percent and more over the medium term, he said.
As long as the Belarusian authorities continue economic reforms at the current, slow pace, the economy will remain vulnerable to future shocks, the IMF expert warned.