OREANDA-NEWS. June 22, 2011. Belarus is going through a serious economic crisis, which has proved to be worse and developed faster than one could expect at the start of the year; however, Belarus is capable of paying its foreign debts, head of the IMF mission to Belarus Chris Jarvis said during a news briefing.

Despite the crisis, Jarvis sees no problems with repayment of foreign loans. “I believe Belarus is capable of paying; the government and National Bank have assured us and other creditors that the debts would be repaid. There are objective factors that make us believe this.”

On the foreign debt, Jarvis said it was manageable and so was the repayment schedule.

The crisis was caused by growing lending volumes and wages. “The solution is in these directions,” he said.

The NBB should curb issue of money and loans by reducing the volume of loans for state programs and raising interest rates for the population to have trust in its savings, he said.

The government should aim at reducing the budget deficit and refrain from raising wages this year. “Prices are growing, but an increase in wages would result in higher prices,” Jarvis warned. Commenting on the policy to limit price increases, Jarvis said it was not a good idea, as it might result in shortages of commodities.