World Bank prepared to boost funding for Belarus

By Andrei Makhovsky

MINSK, Dec 3 (Reuters) - The World Bank is prepared to increase support for structural reforms in Belarus and may extend a loan of at least $100 million to the ex-Soviet state, a senior official with the bank said on Thursday.

Martin Raiser, country director for Belarus, Moldova and Ukraine, said the World Bank was considering the development loan in addition to its existing loan programme for Belarus.

His comments come a day after the bank granted Belarus a long-term $200 million development loan, saying more loans might be issued in the next two years [ID:nGEE5B10ME].

"Officially, there has been no request yet from the Belarussian government, but (the government) signed a programme, which includes it and (this) agrees with our plans," Raiser said.

He added that the exact size of the loan would be agreed upon later, but said the bank approved of the government's recent reforms, which include retail price liberalisation, tax reform and privatisation plans.

The bank's aid, even when increased, is still only a fraction of the $3.63 billion stabilisation programme issued to Belarus late last year and disbursed in tranches.

Belarus, like most of the former Soviet bloc countries, suffered substantially in the aftermath of the global economic crisis. Demand and prices for the country's machinery, agricultural and chemical products has subsided, dragging down gross domestic product.

In the first 10 months of the year, GDP contracted by 1 percent. The government's forecast for the year calls for 1-2 percent growth, but sees the economy rebounding robustly to 11-13 percent growth next year.

The World Bank sees the country's economy growing 2 percent next year.

"We are very careful in our forecast," Raiser said. "And we are always pleased when Belarus achieves better results than we anticipate." (Writing by Lidia Kelly in Moscow; editing by Philippa Fletcher)


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