IMF Advises Belarus to Cut Costs Amid Sanctions
OREANDA-NEWS. Western sanctions undermine the economy of Belarus and limit its financial capabilities. This was announced by the International Monetary Fund (IMF) on Monday, December 20, recommending Minsk to cut budget expenditures to reduce borrowing in foreign currency.
«Although the authorities may continue to borrow funds in other markets, institutions and countries, further reduction of the budget deficit in 2023 would reduce the need to issue new debt obligations», the IMF said in a statement following consultations with the Belarusian authorities.
According to the IMF expert's forecast, Belarus economy will grow by about 2 percent by the end of this year, while inflation will be about 10 percent due to currency depreciation and an increase in world commodity prices. In 2022, the country's GDP growth is expected to be only 0.5 percent, as economic activity is «constrained by the continuing effects of the COVID-19 pandemic, limited space for incentives and the impact of external sanctions».
On December 2, the EU Council imposed the fifth package of sanctions against Belarus as a punitive measure in the conflict over the use of migrants by Minsk as an instrument of pressure on Brussels. Another 17 individuals and 11 legal entities fell under the penalties of the European Union, in particular, representatives of the border guard command of Belarus, employees of the Ministry of Foreign Affairs and the judicial system, the state air carrier Belavia, enterprises of the tourism sector and hotels, as well as JSC Grodno Azot, the production association Belorusneft.
On the same day, the United States, Great Britain and Canada announced that they would support the EU's punitive measures against the Belarusian regime. In particular, the US sanctions, according to the US Treasury Department, concern the Belarusian sovereign debt, 20 individuals and 12 legal entities, including Dmitry Lukashenko, the middle son of the Belarusian ruler. The Belarusian Potash Company, Transaviaexport, Slavkali and Beltechexport currency calculator have also been sanctioned.