BELARUS NEWS AND ANALYSIS

DATE:

26/11/2008

EBRD: Belarusian economy is very sensitive to external turmoil

The European Bank for Reconstruction and Development notes that market reforms in Belarus are made slower than in other countries of the region where the EBRD operates.

"Belarus is singled out in the report as one of the countries of the region where reforms are promoted most slowly," the press-release received on Tuesday by Interfax agency reads. The press-release was published in connection with publication of the report where economic indices and reforms development in the all countries where the EBRD works.

Meanwhile, it is noted that in Belarus "positive steps have been made on opening markets and decreasing the role of the state".

The press-release quotes the words of the leading expert of the EBRD on Belarusian economy Alexander Plekhanov that in 2008 the "golden share" rule was cancelled in the country, the program of transformation into joint-stock companies and privatization of a number of state-run enterprises started, streamlining of taxation is continued, and other measures for improvement of business climate, investment attraction and supporting of a high economic growth are implemented.

"However, a number of serious problems exist. Growing deficit of current account which reflects decrease of demand for Belarusian export in Russia and the CIS countries, and a possible further decrease of conditions along with continuation of a quick growth of consumption increase economy's sensitivity to external turmoil," A. Plekhanov forecasts. To his mind, "for realization of a stable growth due to external financing consistent work is needed for attraction of direct foreign investment, creation of more favourable conditions for private investors, taxation streamlining, and gradual abandonment of excessive regulation". "Considerable volume of investment and deep restructuring of enterprises will have important significance from the point of view of decreasing of industry's energy consumption and protection of export competitive ability," A. Plekhanov concludes.

Besides, the EBRD report says that "in the situation of the world economy deceleration and financial markets turmoil, rate of economic growth in the region of the EBRD operation in 2009 are likely to decrease sharply". The bank calls upon the countries where it sends its investment, pay mushc attention to stabilization of their bank system.

Source:

http://www.cbonds.info/all/eng/news/index.phtml/params/id/416537

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