By Daryna Krasnolutska and Agnes Lovasz
May 18 (Bloomberg) -- Belarus wants to attract as much as $3 billion in investments from abroad this year to fuel economic growth, Economy Minister Nikolay Snopkov said.
"We have every reason" to expect that amount of foreign direct investment, Snopkov said in a May 15 interview in Zagreb on the sidelines of the European Bank for Reconstruction and Development's annual meeting. "We would like to see investments, first of all, into energy and infrastructure. This year's task is to restore the economic growth we had before the crisis."
The former Soviet republic, which separates Russia from the European Union's Baltic region, would raise that money through a state-asset sale program that is calculated to raise 2.7 trillion Belarus rubles ($925 million), he said.
Belarus, a country of 10 million people with an economy the size of Sudan's, is trying to lure investors by selling companies and Eurobonds to help meet its financing needs and wean itself off foreign rescue funds. Belarus received a $3.5 billion International Monetary Fund bailout loan last year, which it won't extend, according to Snopkov, and additional funds from the World Bank and neighboring Russia.
Belarus will keep working with the IMF after ending its standby program, Snopkov said. The country "will take into consideration the IMF's recommendations," while "for the time being, Belarus will not ask for more IMF loans."
IFC, World Bank
The country plans to borrow $250 million from the World Bank and $100 million from its financing arm, the International Finance Corp.
Russia's neighbor and trading partner expects its economy to grow by as much as 12 percent this year, after expanding 6.1 percent in the first four months of 2010, Snopkov said. The main drivers of economic growth are industrial production and exports because of the global recovery, he said.
The inflation rate in Belarus will average between 8 percent and 10 percent this year and the current-account deficit will represent between 6.5 percent and 7 percent of gross domestic product, Snopkov forecast.
The Belarus government has announced it plans to sell government bonds to help cover costs and increase the amount of foreign investment. The state budget deficit will be 1.5 percent of GDP this year and between 1 percent and 1.2 percent of GDP next year, Snopkov said.
President Alexander Lukashenko on May 15 approved a plan to sell $2 billion bonds of five-year euro-denominated bonds to international investors, the government said. External state debt will increase by $1.5 billion to $11 billion as of the end of this year, according to the government.
OAO Sberbank, Deutsche Bank AG, Royal Bank of Scotland Plc and BNP Paribas SA will manage the sale, Russian news service RIA Novosti reported today.
--With assistance from Boris Cerni in Ljubljana and Anna Shiryaevskaya in Moscow. Editor: James M. Gomez
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