Lukashenko Slams Government Plan to Stabilize Economy

Belarusian President Aleksandr Lukashenko called measures suggested by his government, and backed by the International Monetary Fund’s local representative, to stabilize the economy “unacceptable.”

For most citizens, shops will soon become museums where they can “take a look at the market economy of Myasnikovich and Roumas,” Belta cited Lukashenko as saying today at a meeting in the capital, Minsk, referring to Prime Minister Mikhail Myasnikovich and Deputy Prime Minister Sergei Roumas.

Belarus is struggling to contain a balance of payments crisis that has triggered a two-thirds decline in the ruble since January. The government suggested Nov. 8 tightening monetary and fiscal policy, boosting exports and damping domestic demand. The plan, which Lukashenko must approve before it can take effect, may keep 2012 inflation within 19 percent and result in economic growth of 1 percent to 1.5 percent.

Natalia Koliadina, the IMF’s representative in Belarus, said yesterday by phone from Minsk that she supported the government’s plan. Before talks over a new loan can begin, the authorities must “demonstrate a clear commitment to stability and reform and reflect this commitment in their actions,” she said today by e-mail.

Belarus last received a loan from the Washington-based lender in 2009 after demand for its exports fell.

Inflation Accelerates

The decline in the ruble has caused a surge in prices. Inflation accelerated to 92.3 percent from a year earlier in October, compared with 79.6 percent the previous month, the state statistics committee said today on its website.

Adding to cost pressures, state oil company Belneftehim said today it had raised diesel prices by 7 percent to 5,750 rubles ($0.65) a liter and average gasoline prices by 3.5 percent to 5,550 rubles a liter.

The increases were aimed at cutting losses at refineries and deterring “speculative” fuel exports to neighboring countries, the company said in a statement on its website. Sales at filling stations near Belarus’s borders increased 3 to 6 times from a year earlier in the last 10 days of October, according to Belneftehim.

Higher fuel prices sparked protests in July, with Belarusians staging a car blockade in central Minsk after an average jump of 31 percent. Lukashenko was forced to restore prices to their original levels the day after the demonstrations, after which costs have risen incrementally.

To contact the reporter on this story: Aliaksandr Kudrytski in Minsk, Belarus at akudrytski@bloomberg.net

To contact the editor responsible for this story: Balazs Penz at bpenz@bloomberg.net

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