IMF warns Belarus on possible pension fund deficit

The International Monetary Fund has warned the Belarusian authorities on the possible pension fund deficit in the future. The recent decision to increase the retirement age will not solve the problem, IMF experts argue.

Another IMF mission will start working in Belarus on June 21. It will study the economic situation and conduct numerous meetings in the government and National Bank. IMF Mission Chief Peter Dohlman gave a public lecture at the tut.by gallery in Mink on Monday.  The Belarusian economy is in the state of recession and ‘adverse external shocks’ are influencing it, he noted. The International Monetary Fund suggests a number of profound reforms “to stabilize the economy and provide the increase of the people’s well-being in medium-term prospect”.

The international experts have noted the positive steps – the reduction of the wages increase rate, lesser pricing scale and the decrease in directive crediting.  However, the Belarusian economy needs large-scale reforms, they said.

The pension fund deficit might reach 7% of the GDP by 2015, the IMF thinks. However, the pension age increase may reduce the deficit to 5% of the GDP. The pension fund will stay balanced within the next 5 or 6 years. “The deficit will have to be compensated at the cost of reducing pensions or at the cost of budget subsides,” BelaPAN quotes Peter Dohlman.

The Belarusian government is hoping to get a $3bn credit from the IMF.