Fitch expects Belarus’ average inflation rate at 5.4% in 2020, nearing 6% in 2021-2022
<p> MINSK, Nov 17 - PrimePress. The average inflation rate in Belarus will be at 5.4% in 2020 and will approach 6% in 2021-2022, Fitch Ratings said in a press release. </p> <p> </p> <p> As previously reported, on November 13, Fitch revised the outlook for the long-term issuer default rating (IDR) of Belarus in foreign exchange from ‘Stable’ to ‘Negative’ and affirmed the IDR at ‘B.’ Inflation in Belarus was at 0.6% in October 2020, 5.4% in January-October 2020. The official inflation forecast in 2020 was at or below 5%. The National Bank of Belarus later did not rule out that it may grow to 6%. Prime Minister of Belarus Roman Golovchenko said in November that inflation might reach 10% in 2020. </p> <p> </p> <p> “We forecast average inflation at 5.4% in 2020 and to increase to remain close to 6% in 2021-2022, above the projected 4.2% for the 'B' median, balancing the impact of the Belarusian ruble depreciation against softening of domestic demand and administrative measures to rein in price increases of certain commodities. The current account deficit will rise moderately to 4.1% of GDP by 2022, up from 3.1% in 2020, reflecting the weaker ruble and slow recovery,” the agency said. </p> <p> </p> <p> Fitch forecasts the adjusted general government budget deficit will reach 3.4% of GDP in 2020 (surplus of 1.6% in 2019), reflecting a deficit of 2.6% of GDP in the officially reported consolidated budget (2.4% of GDP surplus in 2019), lower-than-previously expected nuclear power plant-related capex (1.3% of GDP against originally budgeted 3.2%) and net off-budget outlays of -0.5% of GDP reflecting SOE debt repayments to the government despite materialization of some guarantees. </p> <p> </p> <p> “The 2021 budget is currently under preparation, but we project the adjusted general government deficit to increase to 4.7% of GDP in 2021, as we now expect a more gradual fiscal consolidation with an officially reported consolidated deficit declining to 2.1% of GDP. The 2021 budget does not include compensation for Russia's oil tax manoeuvre, but authorities have still to outline a longer-term plan to compensate the gradual reduction in oil custom duties. Belarus's track record of generating surpluses at the consolidated budget level and limited financing sources that constrain large deficits underpin our expectation for fiscal consolidation post-crisis,” Fitch said. End </p>
2020-11-18
Primepress
MINSK, Nov 17 - PrimePress. The average inflation rate in Belarus will be at 5.4% in 2020 and will approach 6% in 2021-2022, Fitch Ratings said in a press release.
As previously reported, on November 13, Fitch revised the outlook for the long-term issuer default rating (IDR) of Belarus in foreign exchange from ‘Stable’ to ‘Negative’ and affirmed the IDR at ‘B.’ Inflation in Belarus was at 0.6% in October 2020, 5.4% in January-October 2020. The official inflation forecast in 2020 was at or below 5%. The National Bank of Belarus later did not rule out that it may grow to 6%. Prime Minister of Belarus Roman Golovchenko said in November that inflation might reach 10% in 2020.
“We forecast average inflation at 5.4% in 2020 and to increase to remain close to 6% in 2021-2022, above the projected 4.2% for the 'B' median, balancing the impact of the Belarusian ruble depreciation against softening of domestic demand and administrative measures to rein in price increases of certain commodities. The current account deficit will rise moderately to 4.1% of GDP by 2022, up from 3.1% in 2020, reflecting the weaker ruble and slow recovery,” the agency said.
Fitch forecasts the adjusted general government budget deficit will reach 3.4% of GDP in 2020 (surplus of 1.6% in 2019), reflecting a deficit of 2.6% of GDP in the officially reported consolidated budget (2.4% of GDP surplus in 2019), lower-than-previously expected nuclear power plant-related capex (1.3% of GDP against originally budgeted 3.2%) and net off-budget outlays of -0.5% of GDP reflecting SOE debt repayments to the government despite materialization of some guarantees.
“The 2021 budget is currently under preparation, but we project the adjusted general government deficit to increase to 4.7% of GDP in 2021, as we now expect a more gradual fiscal consolidation with an officially reported consolidated deficit declining to 2.1% of GDP. The 2021 budget does not include compensation for Russia's oil tax manoeuvre, but authorities have still to outline a longer-term plan to compensate the gradual reduction in oil custom duties. Belarus's track record of generating surpluses at the consolidated budget level and limited financing sources that constrain large deficits underpin our expectation for fiscal consolidation post-crisis,” Fitch said. End