The IMF Revises its Forecast for Belarus

The International Monetary Fund revises the macroeconomic forecast for Belarus for 2010 and will work on the macroeconomic forecast for 2011-2013. It was reported on May 13, by the IMF Resident Representative in Belarus, Natalia Kolyadina, in the course of discussion on reasonability and feasibility of starting a new stand-by program between Belarusian authorities and the Fund. "It's clear that revision of the forecast takes into account the changes have taken place in Belarusian economy and its major trading partners, including the EU and the Russian Federation since the end of the fourth stand-by program's review", Natalia Kolyadina said, BelTA informs. According to the IMF Resident Representative in Belarus, the discussion of this forecast with the authorities depends on macroeconomic forecast. "This is the foundation, which serves for discussions and consultations", Natalia Kolyadina noted, adding that the IMF will also "consider economic policy measures being implemented by the government of Belarus, and their impact on the macroeconomic forecast for this year". "We continue to dialogue with the authorities, as the first program is finished", Natalia Kolyadina said. "As the authorities showed its interest to continue the dialogue, and we are interested in its continuation and sustainable development of Belarusian economy, I see very good prospects to continue it, as we have the same tasks of economic policy as the authorities". IMF predicts economic growth by 2.4% in Belarus in 2010 In Minsk, on May 13, there was held a presentation of the next spring issue of the regional report on the prospects of economic development in Europe in 2010, prepared by the IMF staff. "After a deep recession in Europe, the economy begins to grow, but so far this growth is very uneven", said a senior economist at the IMF's European department, Johan Mathisen. According to the IMF representative, in general, the economic growth in euro zone this year is expected to reach 1%, in 2011 — 1.5%. "The same figure in the emerging countries will be 3.3% in 2010, in 2011 — 3.4%. With respect to economic growth in Belarus, the IMF forecast is still at the level of 2.4% in 2010 and 4.6% for 201", Johan Mathisen said. Johan Mathisen believes that one of the main objectives of European region is the resumption of funds inflows, but it is important to avoid excessive funds inflows. In her turn, Natalia Kolyadina explained that Belarus thanks to its macroeconomic policy did not attract the surplus capital. "But at the same time, you can ask a question: did Belarus use all the possibilities to attract a healthy capital? Perhaps if structural changes were faster and more profound, the flow of capital, including foreign direct investment, would have been more significant", noted the IMF Resident Representative in Belarus. Natalia Kolyadina believes that it would "increase working efficiency, develop the sectors involved in foreign trade, and allow the economy of Belarus to be at a competitive level comparing with major trading partners". Structural transformations are necessary condition for the economies' convergence, Kolyadina IMF Resident Representative in Belarus noted that structural reforms are a necessary condition for the economies' convergence. "The question is when to start", Natalia Kolyadina stressed. "If they started in more prosperous times, then it's easy to hold them and does not require tough measures in the area of macroeconomic policy. If the authorities carried them out slowly or did not implement structural changes at all, in the case economic conditions deterioration, it will be necessary to toughen macroeconomic policies and deep structural transformation, which are very unpopular". Natalia Kolyadina also added that these issues will be discussed with Belarusian authorities during the IMF mission works. "We need to assess the development of economy in Belarus in the first quarter of 2010, recent changes in international economy, t