Updated at 17:11,20-07-2018

Russias Ministry of Economic Development: Belarus faces sharp devaluation


Prognoses tell that Belarus will see the repetition of the 2011 crisis and sharp devaluation of the national currency.

The following three years will not be easy for Russias Customs Union partners and other close neighbors. The limited demand on the part of the EU and Russia may lead to crisis syndromes appearing in Belarus and Ukraine. It is said in the prognosis of the social and economic development for 2014-2016, published by the Ministry of Economic Development of the Russian Federation. Decrease in consumer demand, outflow of assets and significant weakening of national currencies are predicted, Interfax reports.

The recurrence of the 2011 crisis, accompanied with sharp devaluation of the Belarusian rouble, is predicted for Belarus in 2014, the authors of the prognosis believe.

The domestic demand remains the main factor of the growth of the Belarusian economy (the growth of the retail turnover is 19.2% in the first half year of 2013, active available incomes of the population have grown by 20%).

"High growth rates of the domestic demand, caused by expanded crediting and further growth of salaries, increase the risks of excessive imports and further deterioration of Belarusian economys foreign standings, which could potentially lead to the repetition of the crisis processes that occurred in 2011", - the prognosis says.

While the domestic demand has grown, the negative balance of the current account has expanded to $2.4 billion in the first quarter of 2013 as compared to the deficiency of $1.8 billion in the fourth quarter of 2012. It is expected that by the end of 2013 the negative balance of the current account will grow up to $3 billion (4.6% of the GDP).

"The growth of the negative balance of the current account in the conditions of the lack of stable financial incomes in the form of direct foreign investments or funds, received from privatization, will lead to the necessity to increase foreign borrowings, as well as to put pressure on international reserve assets. These trends are already leading to the gradual weakening of the Belarusian roubles exchange rate and growth of the devaluation expectations", - the Ministry of Economic Development predicts.