16 January 2019

Moscow, 16 January 2019. The Eurasian Fund for Stabilisation and Development’s (EFSD, Fund) Council approved amendments to Belarus’ reform programme (“Programme”) supported by the EFSD’s financial credit. The amendments concern the conditions of the final, seventh tranche of the credit that needed to be revised because of changes in the schedule of measures to be implemented under the Programme as required by the conditions of the first six tranches.

For this reason, the EFSD Council approved the postponement of the date for checking compliance with the conditions of the seventh tranche from 1 January 2018 to 1 December 2018, as well as the request from the Ministry of Finance of Belarus to extend the final date of credit availability from 31 December 2018 until 31 March 2019.

The approved amendments also include the revised threshold values of quantitative indicators and the refined wording of some of the conditions. The threshold value for the minimum level of gross international reserves was set with the dynamics of this indicator over the first six months of 2018 and the forecast currency flows taken into account and in order to avoid a reduction in gross international reserves below the level necessary to cover two months’ worth of imports. The threshold values for monetary indicators were set at the levels necessary to constrain inflation as at the end of 2018 within the 6% target. The requirement that the Government adopt a resolution to appraise the regulating effects of draft laws that influence the doing of business, which has not been fulfilled in the framework of the sixth tranche, was reintroduced as a control indicator into the conditions of the seventh tranche.

In addition, several requirements that have become irrelevant as of the new control date were excluded from the conditions for the provision of the tranche. These include budget and tariff policy measures fulfilled by the end of 2017, as it was provided for by the Programme. In particular, the government budget in 2017 was implemented with a wide surplus (using the methodology agreed with the EFSD), at 2.3% of GDP, compared to the zero balance envisioned by the Programme. Budget expenses for salaries grew by 8.6%, against the required maximum of 9%. The requirement to increase the repayment of public transport costs from fares to 70% was also fulfilled in 2017. Another requirement, that a presidential decree should be passed to approve the decision-making procedure for local authorities on placing consistently insolvent community-owned agricultural enterprises in trusts, was also excluded from the conditions of the tranche, as an earlier decision has been made to place such enterprises in trusts based on separate presidential resolutions.