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European Development Bank's executive urges Minsk to limit annual inflation to seven percent

Belarus' annual inflation rate should not exceed seven percent, Sergei Shatalov, deputy chairman of the Board of the European Development Bank (EDB), said in an interview with BelaPAN.

The EDB manages loans issued by the Eurasian Economic Community's Anti-crisis Fund, which decided last month to postpone the disbursement of the final tranche of the bloc's $3-billion stabilization loan for Belarus by six months.

Mr. Shatalov warned that Belarus needed to conduct a policy that would help reduce its foreign trade deficit and secure lower inflation. He suggested that the Belarusian government should take measures to bring its foreign trade gap down to no more than four percent of its Gross Domestic Product.

In 2013, Belarus had an inflation rate of 16.5 percent, while its current account deficit was expected to surpass 10 percent of GDP.

The Belarusian government has been softening its monetary policy since the spring of 2012, which has resulted in its failure to meet some terms attached to the stabilization loan and led to the widening of the country's foreign trade deficit and an increase in its external debt, according to Mr. Shatalov.

However, Mr. Shatalov concluded that he was still optimistic about Belarus' economic performance. "The situation is under control and future developments depend on the authorities' determination to continue the stabilization process," he said.