Updated at 13:53,16-05-2022

Belarus' external financial needs estimated at $8 billion

Dzmitry ZAYATS, Naviny.by

Belarus' gross external financing needs will rise to $8 billion, the World Bank said in its report unveiled on Tuesday, BelaPAN said.

World Bank analysts predicted that the country's current account deficit would widen from 2.9 percent of GDP in 2012 to 8.9 percent of GDP this year but narrow slightly to 8.1 percent of GDP in 2014.

Gross external financing needs are exacerbated by significant external repayment obligations on long term external debt, which put significant pressure on the sustainability of the balance of payments, according to the World Bank Economic Update for Belarus.

"With lower than expected FDI [foreign direct investment] inflows, meeting these financing needs will be challenging, especially in an environment of liquidity tightening at global financial markets," the World Bank predicted.

"Shallow fiscal deficits are expected to emerge, as weak economic performance will continue to dampen fiscal revenues while higher than expected interest rate subsidies and external debt service payments (due to rubel weakening) will put upward pressure on expenditures."

The report warned of increasing pressure on the current account deficit.

According to the World Bank, Belarus' exports declined by 22.7 percent and imports by only 10.4 percent in the first eight months of this year, resulting in a deficit in trade in goods of almost $2 billion, compared with an export surplus of $2.3 billion in the same period of 2012. The country's current account deficit surpassed $3 billion in the period.

Belarus' gold and foreign exchange reserves, excluding monetary gold, have been declining since the beginning of the year, dropping to $ 5.5 billion or about 1.6 months of imports, said the World Bank.