Page 8 - bne IntelliNews Country Report: Belarus Dec17

in economic output, the EBRD expects average growth in to remain slightly below that of other comparable emerging markets.
The bank also offered a cautionary note in saying that despite the good news, the ongoing growth story remains subject to many risks, including geopolitical tensions, persistent security threats, the growing appeal of populist anti-globalisation policies in advanced economies and a high degree of concentration in the sources of global growth.
Inflation is largely on track to meet central bank targets and in Russia’s case has already long passed the 4% the Central Bank of Russia (CBR) was aiming for; in November inflation fell to a record 2.7%. However, inflation is a problem elsewhere. In the Baltics, Azerbaijan, Egypt, Turkey and Ukraine inflation rates are in the double digits, reflecting earlier depreciations of the respective currencies. Similarly, inflation is expected to rise in Uzbekistan (a reforming country the EBRD is returning to after a long absence) where the Central Bank raised its policy rate by five percentage points following an exchange rate liberalisation.
In about two-thirds of the countries where the EBRD is present, the ratios of non-performing loans (NPLs) peaked in the double digits after the 2008-09 global financial crisis. In half of the economies, the NPL ratios peaked at levels close to or above 20%. In most countries, NPL ratios continued rising for several years after the crisis before peaking and starting to decline. A few exceptions include the Baltic States where NPLs peaked early and by now have declined to levels around or below 5%. In contrast, in several economies in Eastern Europe and the Caucasus and Central Asia, NPL ratios are yet to start declining. The declines in NPL ratios from their peaks have on average been modest and NPL levels remain elevated across much of the EBRD map.
Growth is expected to moderate somewhat in 2018, to 3%, in line with views of the medium-term growth potential of the region’s economies and reflecting a number of country-specific factors. Still, even this forecast represents an
8 BELARUS Country Report December 2017 www.intellinews.com