S&P lifts Belarus to positive

Standard & Poor's said it revised to positive from stable the outlook on its long-term foreign-currency ratings on the Republic of Belarus.

The agency also said it affirmed the country's long-term sovereign credit ratings at B- and short-term ratings at B. The transfer & convertibility assessment for Belarus is unchanged at B-.

The outlook revision reflects the possibility of an upgrade if the country's high inflation continues to decline, its current account deficit remains fairly narrow in the face of a strengthening economy and its fiscal spending is contained, S&P said.

Inflation declined to 22% at the end of 2012 after averaging more than 50% in 2011 and 2012, the agency said, it is expected to fall to below 20% in 2014. Helped by this decline and the narrower current account deficit, S&P said it considers that pressure on the exchange rate is easing.

The Belarusian government's reluctance to introduce much-needed structural reforms to improve competitiveness and growth prospects is a key weakness, S&P said.

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