Belarus will aim to improve its efficiency and competitiveness, promote economic growth, and reduce financial vulnerabilities in the near future, Deputy Economy Ministry Alexander Zaborovsky said as he outlined key economic reform proposals at the EBRD-Emerging Europe: Outlook on Belarus 2016 event in London on Monday, 24 October.
“The last two years have not been easy for the Belarusian economy. We faced a new economic reality, regional and geopolitical turbulence”, the official acknowledged.
According to him, Belarus has responded to the challenges with a comprehensive program to boost macroeconomic stability. “The most important is to unlock growth potential”, Alexander Zaborovsky said.
The economic policy of Belarus for the next years will be based on five pillars.
The first one is the reform of state-owned enterprises to boost competitiveness and reduce costs. By the end of 2016, the government will develop and start implementing a reform strategy aimed at making those entreprises more market-oriented and less vulnerable to fiscal risks.
The second component of the policy is securing public debt sustainability while preserving and strengthening social safety. Alexander Zaborovsky noted that Belarus has adopted a comprehensive and conservative budget for 2017. In addition, starting next year, the Ministry of Finance will prepare an annual fiscal risks statement that will be incorporated into 2018 budgetary process.
The next direction of policy is conducting money and exchange rate policy consistently, with price and financial stability. Inflation target for the next year is 9%. Such figure will lead to the interest rate reduction and support private investment and economic growth.
The fourth thing, mentioned by Zaborovsky, was adjusting household utility pricing while restructuring energy and communal sector and reducing its cost. So far, the level of cost recovery has risen to 58% from 40% in the beginning of the year; and there are plans to achieve 75% in 2017. At the same time, the government will aim to protect the most vulnerable group of population from the impact of tariff growth.
Finally, the country will aim to improve its investment and business climate. It is expected that Belarus will rise in the Doing Business report this year and in 2017.
The official added that the growth of GDP is planned at 1.7%, contributed by the external demand after the lifting of sanctions and some recovery in Russia and Ukraine.
Alexander Zaborovsky thanked EBRD for its cooperation with Belarus, including project with state-owned sector.