BELARUS NEWS AND ANALYSIS

DATE:

28/08/2006

Belarus: Economy has grown over 8 percent a year in the past three years

by Conrad Schuller

Belarus, whose economy has grown over 8 percent a year in the past three years, is facing much less favourable circumstances ahead because of rising energy prices, the International Monetary Fund said. The possibility of significantly less subsidized energy imports could impart a considerable downside risk to the outlook, according to the IMF. Directors also pointed to Belarus's declining market share in the CIS, the large and growing non-oil current account deficit, the low level of international reserves and the diminishing output gap. Cheap Russian energy has been a key driver behind Belarus' growth between 2002 and 2005 and Gazprom has threatened to at least triple prices next year. In order to prepare for this possible change, most IMF directors urged Minsk to fundamentally alter its fiscal and structural policies starting with spending cuts and liberalizing prices and wages and then make broader structural reforms.

Source:

http://www.fxstreet.com/fundamental/analysis-reports/emerging-markets-weekly/2006-08-28.html