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January 25, 2019 www.intellinews.com I Page 11
Minsk's forecast also takes into account the negative consequences of Russia’s so-called tax manoeuvre for Belarus. The tax manoeuvre shifts the tax burden from export duty on oil and petroleum products to mineral extraction tax (MET) on oil production. It envisages a gradual reduction in the rate of export duty on oil and petroleum products from 30% to zero in the period from 2019 to 2024 and a proportionate increase in MET.
On January 17, the IMF said in a statement that the multinational lender's medium-term outlook for Belarus is "subdued by absent vigorous structural reforms, weighed down by unfavourable demographics and weak productivity".
At this juncture, medium-term growth is projected at 2%, limiting convergence towards the income levels of richer neighbouring countries, according to the IMF.
However, this modest outlook is "conditional" on full compensation from Russia for losses triggered by the so-called tax maneuver. "Should compensation be significantly less than full - and this is the key risk hovering over the Belarusian economy at this stage
- medium-term growth could be materially lower than 2%, and the budget and current account deficits higher than projected above," the statement reads.