Belarus's ratings affirmed, outlook stable - S&P

MUMBAI (Thomson Financial) - Standard & Poor's Ratings Services said it affirmed Belarus's 'B+' foreign currency, 'BB' local currency long-term and 'B' short-term sovereign credit rating with a stable outlook.

S&P said that the ratings reflect unusually large contingent liabilities for the sovereign, due to the state-dominated nature of the economy, while external liquidity is weaker than that of its peers.

Moreover, the uniquely centralized nature of the political system reduces the predictability of policy choices, teh ratings agency said.

However, the ratings are supported by comparatively high wealth and development levels, low general government debt, relatively strong external balance sheet and significant economic potential, it noted.

S&P added that the energy price shock has so far had a less adverse impact on the Belarusian economy and on balance sheets than initially expected.

Strong growth in non-energy exports and high investment growth helped to sustain high economic growth and contained the deterioration in the current account and the government's budget balance, the ratings agency noted.

The stable outlook balances Belarus' low government and external debt burdens against considerable challenges stemming from rising energy prices, the need to boost competitiveness, and fiscal pressures that may emerge as inflation is brought under control, S&P added.