KIEV: The Belarussian economy is likely to contract by 2.25 percent in 2015 and will remain under pressure from an economic downturn in neighbouring Russia, the International Monetary Fund said on Monday.
The former Soviet republic's economy has been battered by a plunge in the Russian rouble and the conflict in Ukraine.
In March the finance ministry said it would ask the IMF for a new financing package.
"The outlook is for a recession and continued external pressures. With Russia - the largest trading partner - in a downturn, the Belarusian economy is projected to contract by 2.25 percent in 2015, led by falling exports," the IMF said in a statement.
It said inflation would likely reach 22 percent and recommended the central bank fully implement a plan focused on bringing down inflation to single digits. Earlier in May the central bank shifted its monetary policy regime to use money supply as its main control over inflation.
It is now holding weekly auctions to provide and remove liquidity from the market.
Regarding Belarus's request for new Fund-supported financing, the IMF said "any future arrangement would require a credible and strong commitment at the highest level to a comprehensive package of deep structural reforms and consistent macroeconomic policies."
President Alezander Lukashenko has run the Belarussian economy along Soviet-style command lines since 1994.
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