Republic of Belarus - Financial System Stability Assessment - Update, Including Report on the Observance of Standards and Codes on Banking Supervision (Electronic book text)

1. The Belarusian economy has performed strongly since 2004, which masked the build-up of vulnerabilities. Annual real GDP growth has been around 10 percent since 2004, and despite the substantial increase in energy import prices from January 2007, macroeconomic performance remained robust until the fourth quarter of 2008 (real GDP growth was 8 percent in 2007 and 10 percent in the first half of 2008).1 At the same time, international reserves remained low, and structural reforms were lagging. Monetary policy has remained anchored by the fixed exchange rate regime.