Install

Get the latest updates as we post them — right on your browser

. Last Updated: 07/27/2016

IMF Urges Belarus to Hike Prices

Higher energy prices will cost Belarus the equivalent of 5.5 percent of its gross domestic product this year, pressuring the state budget, accelerating inflation and slowing economic growth, the International Monetary Fund said Friday.

Belarus must fully pass the higher prices on to consumers or face risks to economic stability, the IMF said. It said the government had passed on 60 percent of the higher costs to domestic energy producers.

Belarus on Jan. 1 agreed to pay more for Russian oil and gas to avoid a cut-off of supply. Belarus is to pay Gazprom $100 per 1,000 cubic meters of gas this year, double last year's price.

"Growth through 2006 owed much to favorable terms for imported energy," the IMF said in a report released Thursday after talks with the government. "The outlook going forward was likely to be less favorable" and the fund "expressed concern about the incomplete pass-through of energy price increases," the report said.

The government should also reduce its intervention in the economy and rein in state-mandated wage increases to reduce its costs and increase the competitiveness of its exports, the IMF said.

The higher prices could cost Belarus as much as 15 percent of its GDP through 2012, the fund said.

Belarus' economic growth slowed to an annual 8.8 percent in the first seven months of this year from 9.9 percent in 2006, the IMF said.