BELARUS NEWS AND ANALYSIS

DATE:

19/12/2008

Belarus says issues to settle before IMF credit

MINSK, Dec 19 (Reuters) - Belarus has a good chance of securing a $2 billion loan from the International Monetary Fund, but must settle unresolved issues with the Fund, a senior government official said on Friday. "The chances are good. The government has done everything," Deputy Prime Minister Viktor Burya told Reuters outside parliament. "But there are still difficult aspects to issues they have raised. Talks are therefore continuing."

He gave no further details on differences with the Fund.

"We will go right up to whatever limit is acceptable to us and our people," he said. Belarus, he said, would manage even if it did not secure the loan.

The IMF had been due to complete its second visit to Belarus on Friday, but the Fund's local office said talks would extend into next week.

President Alexander Lukashenko, in a television interview broadcast on Thursday, said Belarus was ready to accept the devaluation of its currency, as required by the IMF.

He also described other conditions for the loan, including a rollback in public sector salaries, as reasonable.

Officials describe the proposed loan as a "safety cushion" against the effects of the world financial crisis.

Belarus has already received a $1 billion credit from Russia and a second tranche for the same amount is expected next February.

Belarussian officials say the crisis has had only a limited effect on the ex-Soviet state, where much of the economy remains in state hands.

But Economy Minister Nikolai Zaichenko told reporters Belarus was bracing itself for harder times.

"The conditions of contracting markets will not pass Belarus by," he said outside parliament. "The beginning of next year will be difficult. We are unlikely to have gross domestic product growth of more than 5 percent."

Zaichenko last week said growth was likely to slow to 7 percent in the first half of 2009 against 8.6 percent this year.

(Reporting by Andrei Makhovsky; Writing by Ron Popeski; Editing by Victoria Main)

Source:

http://www.iii.co.uk/news/?type=afxnews&articleid=7080318&action=article

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