Banker: Belarus' Govt Will Continue Operating in Rapid Response Mode
OREANDA-NEWS. Belarus will continue reacting to economic challenges in a rapid-response mode in 2014, reckons Belgazprombank CEO Viktor Babariko.
The government's medium-term strategy is hard to track. It appears they are acting on the spot: meeting economic challenges in a rapid-response mode, the banker said. The style of economic management in 2014 is the same as in 2013. There are two mutually contradicting trends in Belarus' economy. The first trend is that the government and the National Bank struggle to improve the quality of credits in the public sector, which accounts for 80% of Belarus' economy. The second trend is based on expectations of ruble devaluation following local currency devaluation in Russia and Kazakhstan, which are Belarus' major trade partners.
A combination of these trends would upset any medium-term strategy and force the government to act on the spot to meet economic challenged in a rapid-response mode.
Bankers and economists fully realize that the exchange rate of the Belarusian ruble cannot be sustained for long, Babariko said. As soon as there are signs of slow devaluation of the Belarusian ruble, there is a growing demand and the rates go up.
The banker expects the government to reconsider its approach to economic management in order to reach a compromise between welfare support and economic efficiency.