OREANDA-NEWS. On 26 August 2009 was announced, that an International Monetary Fund (IMF) mission has started its work in Belarus and is expected to complete it on September 2. Marek Belka, Director of the IMF's European Department, is expected to visit Belarus to participate in the work of the mission, IMF Resident Representative in Minsk Natalia Koliadina told.

Belka is expected to meet with the administration of the National Bank of Belarus, the Finance Ministry and the Belarusian government. “It is his first visit to Belarus as the Director of the European Department, he is very much interested in overcoming the crisis and getting back to high growth rates, therefore the dialogue will focus on the necessity of structural reforms,” Koliadina said.

The timeframe for reforms required to bring Belarus back to sustainable growth will be one of the key points discussed by the mission.

The mission will conduct discussions on the second review of Belarus’ Stand-By Arrangement adopted in January 2009. The mission will also hold annual discussion of Belarus’ economic development in 2009, 2010 and longer term.

The mission will also address Belarus’ macroeconomic forecast for 2009 and 2010. “We will see how much the forecast needs to be adjusted. We are looking into the draft budget for 2010, and we require the forecast to have a pragmatic budget,” Koliadina said, adding that it was opportune that the mission coincided in time with state budget drafting.

The IMF believes rigid fiscal policies are a must for Belarus not only in 2009, but also in 2010. The Fund is certain that Belarus will have to raise the value-added tax rate if it chooses to abolish the 1% turnover tax. “The government cannot afford an additional fiscal incentive,’ Koliadina said.

Asked to comment on monetary policies, she said: “I see no reason why the Belarusian ruble should be devaluated now. The existing 10% band will suffice for the government to meet its Stand-By commitments.”

The Belarusian central bank and the Belarusian government are working hard to meet the criteria as of the next reporting date, October 1, 2009, in order to take the next IMF tranche.

Belarus plans to have two tranches under the SBA supported program in 2009, totaling U.S. USD 1.35 billion.

The Executive Board of the IMF late in June completed the first review of Belarus’ performance under a program supported by a Stand-By Arrangement and increased the financial support to SDR 2.27 billion (about USD 3.52 billion), equivalent to 587% of Belarus’s quota or 7% of its GDP. These decisions enabled the disbursement of SDR 437.93 million (about USD 679.2 million), bringing total disbursements under the program so far to SDR 955.73 million (about USD 1.48 billion).

The Board also granted a waiver of nonobservance of end-March performance criterion on net international reserves, and approved a modification of the end-June performance criteria.