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PRESENTATION OF THE REPUBLIC OF BELARUSOF BELARUS
February 2013
1
BelarusOverviewBelarusOverview
GeographicalPosition KeyIndicators(2012)Area 207,595 km
2
Population 9.46mnEstonia
Currency(asof30.01.2013) BYR,1USD=8,650BYR
Creditratings(M/S&P) B3 (Neg.)/B (Stab.)
GDP,USDbn 63.0
GDPgrowthyoy 1.5%
GDPpercapita,USDthsd 6.7Poland
Russia
Lithuania
Latvia
G
Sweden
Denmark
Belarus
Minsk
p p ,
Foreigntradeturnover,USDbn*9M2012 70.9
Industrialproduction, %ofGDP 31.8%
Inflation 21.8%
BudgetRevenues,USDbn 25.8
BudgetExpenditures, USDbn 25.7
Moldova
Germany
RomaniaHungary
SlovakiaCzechRep.
Austria
It l
Switzerland
Ukraine
SloveniaCroatia g p ,
BudgetBalance,%ofGDP 0.7%
Publicdebt,%ofGDP 23.8%
Externalpublicdebt,%ofGDP 19.0%
SerbiaBulgaria
Italy
Turkey
CroatiaBiH
MontenegroMacedonia
KeyHistoricalEvents
CreationoftheCustomsUnionofBelarus,
KazakhstanandRussia
CreationofaCommonEconomicSpaceofBelarus,KazakhstanandRussia
AgreeingonaUSD3.5bnIMFSBAprogram
SigningtheTreatyonEstablishingtheUnionState
ofBelarusandRussiaIndependence
1991 20122010
MembershipintheCIS,IMFandWorld Bank
2000
CreationoftheEurAsEC(Belarus,Russia,Kazakhstan,
Kyrgyzstan Tajikistan)
2007
Acquiringcreditratingsissuedby S&P
and Moodys
WorldHockeychampionship
in Minsk
20091997 2014
DebutEurobondUSD1.0bnissue
2011
AgreeingonaUSD3.0bnACFStabilisation
Program
Source:NationalStatisticalCommitteeoftheRepublicofBelarus,NationalBankNote:averageofficialUSDexchangeratesused:2,792.54Brfor1USDin2009,2,978.10Brfor1USDin2010,4,623.47BrforUSDin2011,8,267.52Brfor1USDfor9M2012
WorldBank Kyrgyzstan,Tajikistan) and Moody s inMinsk
1
Program
InvestmentHighlightsInvestmentHighlights
Welldiversifiedeconomywithfocus on industrial productionfocusonindustrialproduction
Improving businessImprovingbusinessenvironmentandincreasingcompetitiveness
OneofthemostqualifiedlaborforceinEasternEurope
ActiveforeigntradeplayerEffectivemacroeconomicand budgetarypolicies
Abilitytoabsorbexternalturbulence:y
Managedfloatingexchangeratemechanism
Internationalreservesincrease
2
CreditMetricsComparisonCreditMetricsComparison
GDPperCapita,USDthsd
4 8
PublicDebt,%ofGDP
40,638 04,8 4,4
3,1
MedianBB Belarus MedianB
38,035,5
MedianB MedianBB Belarus
BudgetBalance,%ofGDP
0 5
GrossExternalDebt,%ofcurrentaccountinflows
93,30,5
3,14,2
83,477,4
MedianB MedianBB BelarusBelarus MedianBB MedianB
ed a ed a e a us
BelarusfiscalmetricshaveappearedstrongrelativetoitsBratedpeers.Itsfinancialbalancehas,since2002,consistentlyplaceditin the top half among the 24 currently Brated countries
BelarusfiscalmetricshaveappearedstrongrelativetoitsBratedpeers.Itsfinancialbalancehas,since2002,consistentlyplaceditin the top half among the 24 currently Brated countries
RatingUpgradeTriggers
sustained improvement in competitiveness
RatingUpgradeTriggers
sustained improvement in competitiveness inthetophalfamongthe24currentlyB ratedcountriesBelarusseconomicstrengthbasedonthecountrysrelativelyhighaverageannualrealgrowthrate,adiversifiedindustrialsectorandhighlevelsofpercapitaincome,whicharereflectedinaworkforcethatisgenerallywelleducatedand,thankstolowunemployment,maintainsstrongjobrelatedskills
JULY 4 2012 M d C dit A l i
inthetophalfamongthe24currentlyB ratedcountriesBelarusseconomicstrengthbasedonthecountrysrelativelyhighaverageannualrealgrowthrate,adiversifiedindustrialsectorandhighlevelsofpercapitaincome,whicharereflectedinaworkforcethatisgenerallywelleducatedand,thankstolowunemployment,maintainsstrongjobrelatedskills
JULY 4 2012 M d C dit A l i
sustainedimprovementincompetitiveness diversification offunding sources increasedavailabilityofforeignexchange improvementinexternalbalances
MAY30,2012,StandardandPoors
sustainedimprovementincompetitiveness diversification offunding sources increasedavailabilityofforeignexchange improvementinexternalbalances
MAY30,2012,StandardandPoors
3
JULY4,2012,Moodys,CreditAnalysisJULY4,2012,Moodys,CreditAnalysis
Source:SovereignRiskIndicators(S&P,December2012)basedon2012E
CreditMetricsComparisonCreditMetricsComparison
Gen.Gov.Balance,%ofGDPGDPperCapita,USDthsd PublicDebt,%ofGDP
4,4
0 5 45 12,4
0,5
4 1
Belarus 6thgroup(median)
35,545,1
GrossExternalDebt,%ofcurrentaccountinflows
Belarus 6thgroup(median) 4,1 Belarus 6thgroup(median)
Currentaccountdeficit,%ofGDP Int.Reserves,monthsofimports
Belarus 6thgroup(median)
po ts
2
3
77,497,5
5,2
8,4 Belarus 6thgroup(median) Belarus 6thgroup(median)
4Source:SovereignRiskIndicators(S&P,December2012)basedon2012E
MacroeconomicOverviewMacroeconomicOverview
120
For.ReserveAssets,USDmn
0 3%
CPI,%YoYCurrent Account Balance,%ofGDP
7,916 8,095
40
60
80
100
8,7%
0,3%
5,652 5,031
21,80
20
2009 2010 2011 2012
13,1%15,0%
2009 2010 2011 9M2012 2009 2010 2011 2012
PublicSectorBudgetBalance,GrossExternalDebt,%ofGDP
45,1%51,6%
62,3%58,6%
g ,%ofGDP
3,0%
0,7%
Theauthoritiestighteningofeconomicpoliciesfromlate2011wassuccessfulinreducinginflationandstabilising theforeignexchangemarketduringthefirsthalfof2012
Theauthoritiestighteningofeconomicpoliciesfromlate2011wassuccessfulinreducinginflationandstabilising theforeignexchangemarketduringthefirsthalfof2012
0,7%1,8%
,DavidHofman
Source:IMF,PressRelease12/402,October2012
DavidHofmanSource:IMF,PressRelease12/402,
October2012
2009 2010 2011 30Sept.20122009 2010 2011 2012
5
Source:NationalStatisticalCommittee,NationalBank,MinistryofFinance
EconomicGrowthEconomicGrowth
7,7
RealGDPGrowth,%YoY Developedanddiversifiedindustrialproduction
Strongmarketpositionsinthefollowingindustries:
5,5
1 5
potashfertilizer
harvestmarket
heavy truck market
0,2
1,5
2009 2010 2011 2012E
heavytruckmarket
tractormarket
Majorforeigntradepartners:Russia,EUand
Asia/Africa
DecompositionofGDPGrowth**,%1,8
Asia/Africa
425 8
AverageNominalMonthlyWages,USD
***
0,5 0,5 0,4
0,61 2
0,1
350,2
406,6
339,0
425,8
***
***
***
1,2Industry TransportandcommunicationAgriculture/Forestry NettaxesonproductsConstruction TradeandcateringOther
Source:NationalStatisticalCommittee,MinistryofEconomy*Wi h ki i i ll i i
2009 2010 2011 9M2012 *
6
*Withouttakingintoaccountprivatesmallsizeenterprises**In2012.http://belstat.gov.by/homep/ru/indicators/pressrel/gdp_rgdp.php***ThedollarequivalentiscalculatedaccordingtotheNationalStatisticsCommitteemethodologywhichusestheweightedaveragerateoftheBelarusianrubleagainstthedollarinallsegmentsoftheforeignexchangemarket(publishedonthewebsiteoftheNationalBankofBelarus:2009:1USD=2,803.27BYR;2010:1USD=2,993.74BYR;2011:1USD=5,605.84BYR)
InvestmentsInvestments
30003500
405060
FixedCapitalInvestmentsLendingunderGovernmentPrograms,%ofGDP
21,5%
5001000150020002500
3020100
10203040
12,5%
3,8%
0500
4030
Jan10 Jul10 Jan11 Jul11 Jan12 Jul12
Nominalinvestments(USDmn)
Realinvestmentsgrowth(%YoY,RHS)
2010 2011 2012E
FixedCapitalInvestmentsStructurebySources,%
FixedCapitalInvestmentsStructurebySectors,%
14,0 16,7 Others Others
41 1
35,8 26,1
, Others
Bankingloans
O f d13,0 15,6
11,0 12,7
31,1 30,4Construction
Tradeandcatering
Transport and
12,4 16,1
37,841,1
2011 2012
Ownfunds
Fundsoftheconsolidatedbudget
38,4 34,5
2011 2012
TransportandcommunicationAgriculture/Forestry
Industry
7
Source:NationalStatisticalCommittee(http://belstat.gov.by/homep/ru/indicators/doclad/2012_12/07.pdf),NationalBank
ForeignForeignTradeTrade
40006000
CurrentAccountBalance,USDmn Export/ImportFXFlows,USDmn
60000
10 0008000600040002000
02000
20000
0
20000
40000
100002009 2010 2011 9M2011 9M2012
Secondaryincome PrimaryIncome
Tradebalance Currentaccountbalance
60000
40000
2009 2010 2011 9M2011 9M2012
Importpayments Exportinflows Netflows
ImportedEnergyPrices
265,5
250
300 CompliancewithWTOprinciples Integratedoil,gasandtelecommarket
F t f it l d kf
CESExportOpportunities
147,8187,6
165,6
53,8100
150
200
250 Freemovementofcapitalandworkforce Coordinationofmacroeconomicandindustrialpolicy,
unificationofexchangearrangements Technicalregulation Commonprinciplesofregulationinthefieldofprotection
anddefenseofintellectualpropertyrights, etc. Catalystforreforms,competitivenessdevelopment
d i bl li i
45,0 40,4 56,10
50
2009 2010 2011 2012
Importedgasprices(USD/1000cubicm)Imported oil prices (USD/barrel)
andsustainablepolicymix
TheCustomsUnionofRussia,BelarusandKazakhstanisthefirstsuccessfulexampleinregionaleconomicintegrationbetweencountriesoftheformerSovietUnion.Potentiallytheunioncanbringfurtherbenefitssuchasimprovedcrossborderinfrastructureandstrengthenedinstitutions
S EBRD T iti R t 2012
TheCustomsUnionofRussia,BelarusandKazakhstanisthefirstsuccessfulexampleinregionaleconomicintegrationbetweencountriesoftheformerSovietUnion.Potentiallytheunioncanbringfurtherbenefitssuchasimprovedcrossborderinfrastructureandstrengthenedinstitutions
S EBRD T iti R t 2012*
8
Importedoilprices(USD/barrel)
Source:NationalStatisticalCommittee,NationalBank,MinistryofEconomy*Exchangerateusedforconvention:7.28barrelsperton
Source:EBRD,TransitionReport2012IntegrationAcrossBorders,November2012
Source:EBRD,TransitionReport2012IntegrationAcrossBorders,November2012
ExternalCapitalFlowsExternalCapitalFlows
2 000
4000
CapitalAccount,USDmn FDIInflow
3 9
6 000
4000
2000
0
2000
4,02,7
3,92,6 6,6
8000
6000
2009 2010 2011 9M2011 9M2012
Portfolioinvestments DerivativesOtherinvestments Directinvestments
1,9 1,41,1 0,7
,
2009 2010 2011
FDI(USDbn) Privatizationreceipts(USDbn) FDI/GDP(%)
FDIInflowby Countries,% asof9M2012InvestorProtectionRanking*
Country Rank20132013/2011
RankChangeg
New Zealand #1 (#1)
Singapore #2 (#2)
Hong Kong #3 (#3)
Kazakhstan #10 34 (#44)
Russia48.0%
USA1.2%
Other13.6%
Kazakhstan #10 34(#44)
Belarus #82 27 (#109)RussianFederation #117 24 (#93)
Ukraine #117 6 (#109)
Cyprus4.4%
UK32.8%
9
Source:NationalStatisticalCommittee,NationalBank,TheWorldBankreportsDoingbusinessfor2013and2011*RankingisbasedoninvestorprotectionindexwhichiscalculatedinaccordancewiththeWorldBankmethodologytakingintoaccountqualityofinformationdisclosure,degreeofmanagementresponsibilitiesand rightsofminorityshareholders.Theindexrangesfrom0to10,withhighervaluesindicatingmoreinvestorprotection
EconomicEconomicPolicyPrioritiesPolicyPriorities
Macroeconomicstabilisation/inflationdecreaseD
ConsistencyandpredictabilityofmacroeconomicpolicyD
D Preservationofsustainablelongtermgrowth: productivityincrease competitivenessgains CES t t ti l
D
CESexportpotential FDIattraction economymodernization industrialinnovativedevelopmentp
LoweringdependenceonexternalfinancingandexternaldebtreductionD
RisingproductivityefficiencyD
D10
PreservingsocialachievementsandhumancapitaldevelopmentD
MonetaryMonetaryPolicyObjectivesPolicyObjectives
GuidelinesLatestAchievements
Inflation rate decrease1 Inflation rate decrease1 Inflationreduction
FlexibleexchangeratemechanismbasedonmarketsupplyanddemandwithlimitedparticipationoftheNationalBank
Inflationratedecrease1 Inflationratedecrease1
Economicimbalancesreduction2 Economicimbalancesreduction2
Financialinstitutionsrefinancingonmarketconditions
Maintenanceofinflationadjustedpositivereal interest rates
Exchangeratestabilisation3 Exchangeratestabilisation3
Financialstabilitypreservation4 Financialstabilitypreservation4
InflationRateDecrease
realinterestratesy py p
InflationandRefinanceRateDynamicsin2012
106109 110107106 101
45,0 44,0
38 0
3344
48
61
80
92101
8169 66
56
39
38,0 36,0 35,0 33,3 31,6 30,7 30,2 30,0
11 13 1418
33 3123 22
Jan11 Apr11 Jul11 Oct11 Jan12 Apr12 Jul12 Oct12Inflation % YoY
22,818,0 18,0 20,4 19,2 21,6 15,6
27,6
15,621.6 20,4 16,8
Jan12 Mar12 May12 Jul12 Sep12 Nov12Inflation % MoM Refinance rate %*
Source:NationalStatisticalCommittee(http://belstat.gov.by/homep/ru/indicators/doclad/2012_12/12.pdf),NationalBank(http://www.nbrb.by/statistics/Dynamic/)*Annualizedinflationcalculatedasmonthlyratemultipliedby12 11
Inflation,%YoY Inflation,%MoM Refinancerate,%
MonetaryDisciplineMonetaryDiscipline
BYR/USDExchangeRate Dynamics Fullymarketablenationalexchangerate Interventionsmaybeconductedtomitigatesharp
currencyfluctuations
SinceOct11:ManagedFloating
Internationalreservesaresubjecttofurtherincreasebymeansof: Positiveforeigntradebalance FDIattraction Privatisation receipts
Jan09 Sep11:Peggingtocurrency
basket(RUR,EUR,USD)TheauthoritiesunifiedtheexchangerateandintroducedaflexibleexchangerateregimeinOctober2011.Sincemid2011theyhavealsopursuedfiscalandincomerestraintandtightenedmonetarypolicy These policies have restored FX markets reduced inflation
TheauthoritiesunifiedtheexchangerateandintroducedaflexibleexchangerateregimeinOctober2011.Sincemid2011theyhavealsopursuedfiscalandincomerestraintandtightenedmonetarypolicy These policies have restored FX markets reduced inflation
Jan08 Jul08 Jan09 Jul09 Jan10 Jul10 Jan11 Jul11 Jan12 Jul12 Jan13
InternationalReservesandM2Development
policy.ThesepolicieshaverestoredFXmarkets,reducedinflationandthecurrentaccountdeficit,andledtoanincreaseinreserves
Source:IMF,CountryReport12/113,May2012
policy.ThesepolicieshaverestoredFXmarkets,reducedinflationandthecurrentaccountdeficit,andledtoanincreaseinreserves
Source:IMF,CountryReport12/113,May2012
6000
8000
10000
12000
0
2000
4000
Jan 09 May 09 Sep 09 Jan 10 May 10 Sep 10 Jan 11 May 11 Sep 11 Jan 12 May 12 Sep 12 Jan 13
Source:NationalBank(http://www.nbrb.by/statistics/reserveAssets/assets.asp,http://www.nbrb.by/statistics/MonetaryStat/BroadMoney)*ForcalculatingmonthlyM2previousmonthlastworkdayexchangeratewasused 12
Jan09 May09 Sep09 Jan10 May10 Sep10 Jan11 May11 Sep11 Jan12 May12 Sep12 Jan13
InternationalReserveAssets,USDmn M2,USDmn*
BankingSectorBankingSector
Depositsbycustomertype*
BankingSectorhighlights*:
#ofbanks 32(27withforeigncapitalparticipation)
t USD 37 5 b (60 9% f GDP)
Loansbyborrowertype*
5% 1% assets USD37.5bn (60.9%ofGDP)
loans USD23.6bn (38.3%ofGDP)
deposits USD16.9bn (27.4%ofGDP)
capital USD 5.4 bn (8.9% of GDP)
12%
29%54%
%
46%
33%
20%
1%
capital USD5.4bn (8.9%ofGDP)
CAR 20.8%vs.8%regulatoryfloor
ROA 1.82% publicsectorprivatesectorindividuals
33%
publicsectorprivatesectorindividuals
CapitalAdequacyRatioandNPLRatio*
4 2% 3 5%4,2%
5,5%
BankingSectorRates
80%
nonbankinstitutions nonbankinstitutions
4,2% 3,5%,
36,2%
30,0%
40%
60%
19,8% 20,5%24,7% 20,8%
Dec09 Dec10 Dec11 Dec12
Capitaladequacy NPLRatio
0%
20%
Jan11Apr11 Jul11 Oct11 Jan12 Apr12 Jul12 Oct12 Jan13
Interbank market interest rate Refinancing rate p q y
Source:NationalStatisticalCommittee,NationalBank(http://www.nbrb.by/statistics/Dynamic,http://www.nbrb.by/statistics/PrStavkiN)*Asof31Dec.2012
Interbankmarketinterestrate Refinancingrate
13
PublicSectorBudgetPublicSectorBudget
RevenuesStructurein2012* ExpendituresStructurein2012*
Excise5.3%Oth 7 7%
Debtservicepayments4.2%Others7.1%
USD25.7 bn
Others7.7%
VAT21.3%Taxonprofit8.8%
Personalincometax9.2%
Ot e s . %
FSPP26.8%
Nationaldefense2.3%
Utilitiesandhousebuilding5.4%
Socialexpenditures6.3%
NationalUSD
25.8 bn 25.7bnNontaxrevenues9.0%
FSPP27.0%
Exportduties11.8%
Healthcare9.7%
Generalpublicexpenditures12.5%
Nationaleconomy13.0%
Education12.8%
25.8bn
PublicSectorBudget,%ofGDP
45,7% 46,4% 43 3%2,8%45,7%
41,5%
38,7%
40,7% 39,7%
, 43,3%35,9%
40,0% 39,6%
0,7%
1 8%
0,7% 0.1%
1,8%
2009 2010 2011 2012E 2013F
Revenue,%ofGDP Expenses,%ofGDP BudgetBalance
Source:MinistryofFinance*Asperbudgetlawfor2012Note:Totalsumexceeds100%duetostatisticaldiscrepancies
14
FiscalFiscalPolicyPolicyGuidelinesGuidelines
MacroeconomicstabilitytoremainthemaintargetoffiscalpolicyDExecutionofnondeficitalllevelsbudgetsDManageablepublicdebtlevelD
Budgetconsolidation: tighteconomyofbudgetorganisations
Dg y g g
limitationofpubliccapitalexpenditures containingrealwagegrowth(takingintoaccounttherealeconomicgrowth) increaseofrecoveryratefortheutilitiesandtransportservices t t t i th id i stateenterprisesrevenuegrowthamidrecoveringeconomy
Mediumtermfiscalceilings: Budgetdeficit 0% ofGDP PublicDebt upto45% ofGDP
WealsowelcometheGovernmentsdeterminationtobalancethebudgetin2012and2013,whichisconsistentwithstabilisation
DavidHofmanHeadoftheIMFMissioninBelarus,
October2012,IMFPressReleaseNo.12/402
WealsowelcometheGovernmentsdeterminationtobalancethebudgetin2012and2013,whichisconsistentwithstabilisation
DavidHofmanHeadoftheIMFMissioninBelarus,
October2012,IMFPressReleaseNo.12/402p
15
PublicPublicDebtDebt OverviewOverview Asof31.12.2012theexternalpublicdebtwas $12.0bn or19.0%ofGDP(vs.$11.8bn or20.1%ofGDPasof31.12.2011)
Externalpublicdebtraisingaimedateconomicpotentialdeveloping
Maincharacteristicsofexternalpublicdebt:
42.8% officialandmultilateral(IFI) loans**
shareofprojectfinancingloans 15.8%**
averagematurity 4.7years***
averageinterestrate 3.7%***
GrossPublicDebt*,%ofGDP
Legislativeceiling 45%Maastrichtcriterium 60%
ExternalandDomesticPublicDebt*,USD bn
1,92,1 3,0
2,0
18,1% 18,8% 24,9% 23,8% 24,0%
2009 2010 2011 2012 2013E
7,9 9,711,8 12,0 14,4
1,2,
2009 2010 2011 2012 2013E
ExternalPublicDebt*,%ofGDP
ExternalPublicDebt InternalPublicDebt
ExternalPublicDebtSpendings*, USDbn
16,4% 17,8%20,1% 19,0% 20,6%
, %
1,0 1,2 1,4 1,94,8
6,9 8,510,4 10,1
9,6
2009 2010 2011 2012 2013E
Source:MinistryofFinancecalculationsusing2011methodology*20092010datarecalculatedasperchangesinthemethodologyusedsince2011**Asof31.12.12***Asof30.11.12
, , ,
2009 2010 2011 2012 2013E
ProjectFinancing Nonbinding
16
ExternalDebtExternalDebtPortfolioPortfolio
Outstandingdebt,USDbn
IMF 3.03
A i i i d A C**
1 68
ExternalPublicDebtSourcesExternalDebtRecipients*
Monetaryauthorities1.3%
Nonfinancialsector44.0%
AnticrisisFundEurAsEC 1.68
IBRD 0.42
Bonds 1.80
Venezuela 0.32
Nuclear Power Plant***
0 09Public
th iti 38 8%B k 15 9% NuclearPower Plant 0.09
Chinese banks 1.62
USA(TCC) 0.04
Russia 3.00
Total 12.00
authorities38.8%Banks15.9%
External PublicDebtCurrencyStructure(asof31.12.2012)
ExternalPublicDebtTypes(asof31.12.2012)
Others 1.3%Others1.3%
SDR25.2%
EUR2.4%
Internationalcredits42.8%
Bonds15.0%
USD71.1%
Bilateralloans42.2%
Source:MinistryofFinancecalculationsasof31.12.2012,NationalBank* Asof30.09.2012,NationalBank**SignedcreditagreementforuptoUSD3 bnin6tranchestill2013.MembersofEurAsEC:Belarus,Kazakhstan,KyrgyzRepublic,Russia,Tajikistan,Uzbekistan;Observes:Armenia,Moldova,Ukraine.AnticrisisFundEurAsEC hereinafterreferredtoasACFEurAsEC*** SignedcreditagreementforuptoUSD10bn 17