OREANDA-NEWS. April 29, 2011. Results of the socio-economic development of Belarus in the first quarter of 2011 and objectives of the Government to implement the important parameters of the forecast in 2011 were discussed at a meeting of the Council of Ministers chaired by the Prime Minister of Belarus Mikhail Myasnikovich.

The Belarusian Economy Ministry is revising inflation estimates for 2011, Belarusian Economy Minister Nikolai Snopkov told media after a meeting.

“We are calculating a new forecast now. Inflation is already past the forecast level although inflation base without energy industry and imported food makes up 3.6-3.7%,” said Nikolai Snopkov.

“We are calculating and wouldn’t like to be wrong again. Our calculations take into account whether the National Bank will set a balanced exchange rate and whether shrinkage of state budget spending will allow hitting GDP targets. So far we cannot answer the first question or the second one. For now we wouldn’t like to publicize the scenarios we are calculating,” stressed the Economy Minister.

In his words, problems on the foreign exchange market have resulted in certain negative impact on the price situation in Belarus. The problems have also spurred the consumer price index growth.

“As a matter of principle 75% of inflation has monetary origins. Everything related to banking industry, monetary management directly influences inflation among other things,” explained Nikolai Snopkov.

The Finance Ministry of Belarus began work on the draft budget for 2012, Finance Minister of Belarus Andrei Kharkovets told reporters.

“Work on the 2012 budget bill is already in progress. Now discussions are underway in the Council of Ministers with participation of representatives from the key ministries, public organizations, members of parliament,” Andrei Kharkovets said.

He explained that currently the tax policy, and approaches to the financing of budgetary expenditures next year are under consideration. This year the Finance Ministry pursues a strict fiscal policy, which is reflected in substantial cuts in budgetary expenditures.

As previously reported, the Finance Ministry plans to reduce the profit tax from 24% to 20% in 2012. “We would also like to abolish inefficient individual privileges, which have been granted to some payers. We want to make the tax system in Belarus neutral with regard to all economic sectors and to apply the principle of equitable distribution of resources through the budget,” Andrei Kharkovets stressed.

Belarus hopes to agree with Russia on the terms of a loan in a week, Finance Minister of Belarus told reporters.

Andrei Kharkovets added that the Deputy Finance Ministers of the two countries met in Moscow. “As far as I know, the talks were rather fruitful, and I believe that we are on a very high level of negotiations at the moment. We have virtually coordinated the series of measures that Belarus is due to carry out on its way to macroeconomic stabilization,” the Finance Minister said.

He also noted that the sides have agreed that Belarus needs to obtain loans both from Russia and the EurAsEC Anticrisis Fund. Apart from that, the two countries have agreed that the Fund will send a team of experts to Belarus next week. That means that the necessary consultations will continue in Belarus.

“We are planning to get down to the final document next week. The document will be submitted to the central bank chairmen and finance ministers of Belarus and Russia. I suppose that we will discuss these issues with my Russian counterpart soon,” Andrei Kharkovets said.

“I am confident that the document will be ready for signing in a week. Almost all technical issues are settled,” he added.

Speaking about concrete terms to obtain the loan, the minister said that any loan requires special procedures. That is why the signing of the document is only the first step to implement the necessary technical procedures, stipulated by the Finance Ministries of Belarus and Russia, as well as by the EurAsEC Anticrisis Fund. “What concerns the EurAsEC loan, it is clear that the decision to grant the loan will be taken at the session of the Fund’s board,” said Andrei Kharkovets, adding that the session is scheduled for May 2011.