David Hoffman: IMF mission forecasts economic recession in Belarus by about 2 per cent

Unless we introduce cardinal reforms, the growth rate of the Belarusan economy in the near 5 years will remain extremely low.

This year the International Monetary Fund (IMF) mission in Belarus forecasts economic recession in Belarus by about 2 per cent. However, taking into account general ambiguity, the range of mistake can be quite high. This was stated by David Hoffman, the head of the IMF mission, at the briefing dedicated to the work of the IMF mission in Minsk on 5^th-16^th of March.

According to him, in 2016 IMF forecasts certain improvement of the situation. However, in the long-term perspective, i.e. in the following 5 years, the growth rate of the Belarusan economy will be very low.

If the authorities will take into account the recommendations given by the IMF, this and next year the growth rate of the economy might get even lower than the ones forecasted today; however, in the middle-term perspective we will be observing considerable growth.

In general, as David Hoffman noted, today Belarusan economic model is still vulnerable to economic shocks. In this relation we need to immediately perform decisive reorientation of the economic policy in order to provide stability and stable restoration of economy. That is why recommendations of the latest IMF missions remain very topical.

“Deep structural reforms are still critically important to provide the future stable growth and leave the cycle of repeating crises. In this relation the mission insistently recommends the authorities to elaborate and realize an ambitious program of reforms, where main efforts will be concentrated at the initial stage and aimed at market-oriented economy. This program has to provide for the following: decisive liberalization of prices, including the plan of quick rise of tariffs on housing and communal services and transport until it completely compensates for the expenses with the clearly set time; quick stage-by-stage removal of obligatory targets for enterprises; responsible privatization plans in corporative and bank sector; strengthening of the social security system aimed at supporting vulnerable segments in the society”, - David Hoffman stated.

Talking about IMF’s new loan program in relation to Belarus, the head of the mission noted that clear intelligible initiative of the Belarusan authorities.

“For a new program IMF still needs a responsible serious intention voiced at the highest level, as well a realization of a comprehensive package of deep structural reforms and consistent macroeconomic policy that could be supported by the IMF Executive Council”, - emphasized David Hoffman.