BELARUS NEWS AND ANALYSIS

DATE:

21/08/2007

Belarus assigned 'B+' longterm foreign currency rating with stable outlook - S&P

MUMBAI (Thomson Financial) - Standard & Poor's Ratings Services assigned its 'B+' long-term foreign currency and 'BB' long-term local currency sovereign credit ratings to the Republic of Belarus.

At the same time, 'B' short-term sovereign credit ratings were assigned.

The outlook is stable.

The agency said the ratings on Belarus reflect unusually large contingent liabilities for the sovereign due to the state-dominated nature of the economy, weak external liquidity and the uniquely centralized nature of the political system, which reduces the predictability of policy choices.

The ratings are supported, however, by comparatively high wealth and development levels, low general government debt, a relatively strong external balance sheet and significant economic potential due to substantial industrial capital stock and a highly educated workforce.

In early 2007, prices for Russian natural gas were doubled. In parallel, favourable terms enabling Belarus to refine cheap Russian crude and sell it on to West European markets at international prices were hardened.

These new energy arrangements will have a significant impact on Belarus, S&P said.

S&P's baseline forecast is for Belarus' current account deficit to widen to 8-11 pct of GDP in 2007-2010, a general government deficit of 5.0 pct in 2010, and economic growth to moderate to 4.0 pct over 2007-2010.

Source:

http://www.iii.co.uk/news/?type=afxnews&articleid=6251469&action=article

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