Belarusian economic model has exhausted its potential: World Bank

11:33, June 25, 2011      

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The Belarusian economic model has exhausted its potential, World Bank Country Director for Ukraine, Belarus and Moldova Martin Raiser told local media on Friday as he commented on his three-day visit to Belarus.

According to the Raiser, the time needed to achieve the necessary adjustment has been reduced considerably in the current situation of macroeconomic imbalances. He forecast that the growth rate of the Belarusian economy in the second half of 2012 will be much lower than it was in the first half, and that is good for the restoration of the macroeconomic balance.

"We are already seeing measures taken to reduce aggregate demand," he said, adding "Belarus can deal with this task and will work more efficiently if the corresponding structural reforms are put in place."

Raiser also stressed that the World Bank supports the actions of the Belarusian National Bank to reconsider the credit policy and toughen the monetary management.

The Belarusian currency has come under severe pressure in the first five months of the year from a large trade deficit, generous wage increases and loans granted by the government ahead of the December 2010 presidential elections, which spurred strong demand for foreign currency.

At the end of May the National Bank cut almost in half the value of the Belarusian ruble against the dollar, causing panic across the country.

Source: Xinhua
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