PRESENTATION OF THE REPUBLIC OF BELARUSOF BELARUS

February 2013

1

BelarusOverviewBelarusOverview

GeographicalPosition KeyIndicators(2012)Area 207,595 km

2

Population 9.46mnEstonia

Currency(asof30.01.2013) BYR,1USD=8,650BYR

Creditratings(M/S&P) B3 (Neg.)/B (Stab.)

GDP,USDbn 63.0

GDPgrowthyoy 1.5%

GDPpercapita,USDthsd 6.7Poland

Russia

Lithuania

Latvia

G

Sweden

Denmark

Belarus

Minsk

p p ,

Foreigntradeturnover,USDbn*9M2012 70.9

Industrialproduction, %ofGDP 31.8%

Inflation 21.8%

BudgetRevenues,USDbn 25.8

BudgetExpenditures, USDbn 25.7

Moldova

Germany

RomaniaHungary

SlovakiaCzechRep.

Austria

It l

Switzerland

Ukraine

SloveniaCroatia g p ,

BudgetBalance,%ofGDP 0.7%

Publicdebt,%ofGDP 23.8%

Externalpublicdebt,%ofGDP 19.0%

SerbiaBulgaria

Italy

Turkey

CroatiaBiH

MontenegroMacedonia

KeyHistoricalEvents

CreationoftheCustomsUnionofBelarus,

KazakhstanandRussia

CreationofaCommonEconomicSpaceofBelarus,KazakhstanandRussia

AgreeingonaUSD3.5bnIMFSBAprogram

SigningtheTreatyonEstablishingtheUnionState

ofBelarusandRussiaIndependence

1991 20122010

MembershipintheCIS,IMFandWorld Bank

2000

CreationoftheEurAsEC(Belarus,Russia,Kazakhstan,

Kyrgyzstan Tajikistan)

2007

Acquiringcreditratingsissuedby S&P

and Moodys

WorldHockeychampionship

in Minsk

20091997 2014

DebutEurobondUSD1.0bnissue

2011

AgreeingonaUSD3.0bnACFStabilisation

Program

Source:NationalStatisticalCommitteeoftheRepublicofBelarus,NationalBankNote:averageofficialUSDexchangeratesused:2,792.54Brfor1USDin2009,2,978.10Brfor1USDin2010,4,623.47BrforUSDin2011,8,267.52Brfor1USDfor9M2012

WorldBank Kyrgyzstan,Tajikistan) and Moody s inMinsk

1

Program

InvestmentHighlightsInvestmentHighlights

Welldiversifiedeconomywithfocus on industrial productionfocusonindustrialproduction

Improving businessImprovingbusinessenvironmentandincreasingcompetitiveness

OneofthemostqualifiedlaborforceinEasternEurope

ActiveforeigntradeplayerEffectivemacroeconomicand budgetarypolicies

Abilitytoabsorbexternalturbulence:y

Managedfloatingexchangeratemechanism

Internationalreservesincrease

2

CreditMetricsComparisonCreditMetricsComparison

GDPperCapita,USDthsd

4 8

PublicDebt,%ofGDP

40,638 04,8 4,4

3,1

MedianBB Belarus MedianB

38,035,5

MedianB MedianBB Belarus

BudgetBalance,%ofGDP

0 5

GrossExternalDebt,%ofcurrentaccountinflows

93,30,5

3,14,2

83,477,4

MedianB MedianBB BelarusBelarus MedianBB MedianB

ed a ed a e a us

BelarusfiscalmetricshaveappearedstrongrelativetoitsBratedpeers.Itsfinancialbalancehas,since2002,consistentlyplaceditin the top half among the 24 currently Brated countries

BelarusfiscalmetricshaveappearedstrongrelativetoitsBratedpeers.Itsfinancialbalancehas,since2002,consistentlyplaceditin the top half among the 24 currently Brated countries

RatingUpgradeTriggers

sustained improvement in competitiveness

RatingUpgradeTriggers

sustained improvement in competitiveness inthetophalfamongthe24currentlyB ratedcountriesBelarusseconomicstrengthbasedonthecountrysrelativelyhighaverageannualrealgrowthrate,adiversifiedindustrialsectorandhighlevelsofpercapitaincome,whicharereflectedinaworkforcethatisgenerallywelleducatedand,thankstolowunemployment,maintainsstrongjobrelatedskills

JULY 4 2012 M d C dit A l i

inthetophalfamongthe24currentlyB ratedcountriesBelarusseconomicstrengthbasedonthecountrysrelativelyhighaverageannualrealgrowthrate,adiversifiedindustrialsectorandhighlevelsofpercapitaincome,whicharereflectedinaworkforcethatisgenerallywelleducatedand,thankstolowunemployment,maintainsstrongjobrelatedskills

JULY 4 2012 M d C dit A l i

sustainedimprovementincompetitiveness diversification offunding sources increasedavailabilityofforeignexchange improvementinexternalbalances

MAY30,2012,StandardandPoors

sustainedimprovementincompetitiveness diversification offunding sources increasedavailabilityofforeignexchange improvementinexternalbalances

MAY30,2012,StandardandPoors

3

JULY4,2012,Moodys,CreditAnalysisJULY4,2012,Moodys,CreditAnalysis

Source:SovereignRiskIndicators(S&P,December2012)basedon2012E

CreditMetricsComparisonCreditMetricsComparison

Gen.Gov.Balance,%ofGDPGDPperCapita,USDthsd PublicDebt,%ofGDP

4,4

0 5 45 12,4

0,5

4 1

Belarus 6thgroup(median)

35,545,1

GrossExternalDebt,%ofcurrentaccountinflows

Belarus 6thgroup(median) 4,1 Belarus 6thgroup(median)

Currentaccountdeficit,%ofGDP Int.Reserves,monthsofimports

Belarus 6thgroup(median)

po ts

2

3

77,497,5

5,2

8,4 Belarus 6thgroup(median) Belarus 6thgroup(median)

4Source:SovereignRiskIndicators(S&P,December2012)basedon2012E

MacroeconomicOverviewMacroeconomicOverview

120

For.ReserveAssets,USDmn

0 3%

CPI,%YoYCurrent Account Balance,%ofGDP

7,916 8,095

40

60

80

100

8,7%

0,3%

5,652 5,031

21,80

20

2009 2010 2011 2012

13,1%15,0%

2009 2010 2011 9M2012 2009 2010 2011 2012

PublicSectorBudgetBalance,GrossExternalDebt,%ofGDP

45,1%51,6%

62,3%58,6%

g ,%ofGDP

3,0%

0,7%

Theauthoritiestighteningofeconomicpoliciesfromlate2011wassuccessfulinreducinginflationandstabilising theforeignexchangemarketduringthefirsthalfof2012

Theauthoritiestighteningofeconomicpoliciesfromlate2011wassuccessfulinreducinginflationandstabilising theforeignexchangemarketduringthefirsthalfof2012

0,7%1,8%

,DavidHofman

Source:IMF,PressRelease12/402,October2012

DavidHofmanSource:IMF,PressRelease12/402,

October2012

2009 2010 2011 30Sept.20122009 2010 2011 2012

5

Source:NationalStatisticalCommittee,NationalBank,MinistryofFinance

EconomicGrowthEconomicGrowth

7,7

RealGDPGrowth,%YoY Developedanddiversifiedindustrialproduction

Strongmarketpositionsinthefollowingindustries:

5,5

1 5

potashfertilizer

harvestmarket

heavy truck market

0,2

1,5

2009 2010 2011 2012E

heavytruckmarket

tractormarket

Majorforeigntradepartners:Russia,EUand

Asia/Africa

DecompositionofGDPGrowth**,%1,8

Asia/Africa

425 8

AverageNominalMonthlyWages,USD

***

0,5 0,5 0,4

0,61 2

0,1

350,2

406,6

339,0

425,8

***

***

***

1,2Industry TransportandcommunicationAgriculture/Forestry NettaxesonproductsConstruction TradeandcateringOther

Source:NationalStatisticalCommittee,MinistryofEconomy*Wi h ki i i ll i i

2009 2010 2011 9M2012 *

6

*Withouttakingintoaccountprivatesmallsizeenterprises**In2012.http://belstat.gov.by/homep/ru/indicators/pressrel/gdp_rgdp.php***ThedollarequivalentiscalculatedaccordingtotheNationalStatisticsCommitteemethodologywhichusestheweightedaveragerateoftheBelarusianrubleagainstthedollarinallsegmentsoftheforeignexchangemarket(publishedonthewebsiteoftheNationalBankofBelarus:2009:1USD=2,803.27BYR;2010:1USD=2,993.74BYR;2011:1USD=5,605.84BYR)

InvestmentsInvestments

30003500

405060

FixedCapitalInvestmentsLendingunderGovernmentPrograms,%ofGDP

21,5%

5001000150020002500

3020100

10203040

12,5%

3,8%

0500

4030

Jan10 Jul10 Jan11 Jul11 Jan12 Jul12

Nominalinvestments(USDmn)

Realinvestmentsgrowth(%YoY,RHS)

2010 2011 2012E

FixedCapitalInvestmentsStructurebySources,%

FixedCapitalInvestmentsStructurebySectors,%

14,0 16,7 Others Others

41 1

35,8 26,1

, Others

Bankingloans

O f d13,0 15,6

11,0 12,7

31,1 30,4Construction

Tradeandcatering

Transport and

12,4 16,1

37,841,1

2011 2012

Ownfunds

Fundsoftheconsolidatedbudget

38,4 34,5

2011 2012

TransportandcommunicationAgriculture/Forestry

Industry

7

Source:NationalStatisticalCommittee(http://belstat.gov.by/homep/ru/indicators/doclad/2012_12/07.pdf),NationalBank

ForeignForeignTradeTrade

40006000

CurrentAccountBalance,USDmn Export/ImportFXFlows,USDmn

60000

10 0008000600040002000

02000

20000

0

20000

40000

100002009 2010 2011 9M2011 9M2012

Secondaryincome PrimaryIncome

Tradebalance Currentaccountbalance

60000

40000

2009 2010 2011 9M2011 9M2012

Importpayments Exportinflows Netflows

ImportedEnergyPrices

265,5

250

300 CompliancewithWTOprinciples Integratedoil,gasandtelecommarket

F t f it l d kf

CESExportOpportunities

147,8187,6

165,6

53,8100

150

200

250 Freemovementofcapitalandworkforce Coordinationofmacroeconomicandindustrialpolicy,

unificationofexchangearrangements Technicalregulation Commonprinciplesofregulationinthefieldofprotection

anddefenseofintellectualpropertyrights, etc. Catalystforreforms,competitivenessdevelopment

d i bl li i

45,0 40,4 56,10

50

2009 2010 2011 2012

Importedgasprices(USD/1000cubicm)Imported oil prices (USD/barrel)

andsustainablepolicymix

TheCustomsUnionofRussia,BelarusandKazakhstanisthefirstsuccessfulexampleinregionaleconomicintegrationbetweencountriesoftheformerSovietUnion.Potentiallytheunioncanbringfurtherbenefitssuchasimprovedcrossborderinfrastructureandstrengthenedinstitutions

S EBRD T iti R t 2012

TheCustomsUnionofRussia,BelarusandKazakhstanisthefirstsuccessfulexampleinregionaleconomicintegrationbetweencountriesoftheformerSovietUnion.Potentiallytheunioncanbringfurtherbenefitssuchasimprovedcrossborderinfrastructureandstrengthenedinstitutions

S EBRD T iti R t 2012*

8

Importedoilprices(USD/barrel)

Source:NationalStatisticalCommittee,NationalBank,MinistryofEconomy*Exchangerateusedforconvention:7.28barrelsperton

Source:EBRD,TransitionReport2012IntegrationAcrossBorders,November2012

Source:EBRD,TransitionReport2012IntegrationAcrossBorders,November2012

ExternalCapitalFlowsExternalCapitalFlows

2 000

4000

CapitalAccount,USDmn FDIInflow

3 9

6 000

4000

2000

0

2000

4,02,7

3,92,6 6,6

8000

6000

2009 2010 2011 9M2011 9M2012

Portfolioinvestments DerivativesOtherinvestments Directinvestments

1,9 1,41,1 0,7

,

2009 2010 2011

FDI(USDbn) Privatizationreceipts(USDbn) FDI/GDP(%)

FDIInflowby Countries,% asof9M2012InvestorProtectionRanking*

Country Rank20132013/2011

RankChangeg

New Zealand #1 (#1)

Singapore #2 (#2)

Hong Kong #3 (#3)

Kazakhstan #10 34 (#44)

Russia48.0%

USA1.2%

Other13.6%

Kazakhstan #10 34(#44)

Belarus #82 27 (#109)RussianFederation #117 24 (#93)

Ukraine #117 6 (#109)

Cyprus4.4%

UK32.8%

9

Source:NationalStatisticalCommittee,NationalBank,TheWorldBankreportsDoingbusinessfor2013and2011*RankingisbasedoninvestorprotectionindexwhichiscalculatedinaccordancewiththeWorldBankmethodologytakingintoaccountqualityofinformationdisclosure,degreeofmanagementresponsibilitiesand rightsofminorityshareholders.Theindexrangesfrom0to10,withhighervaluesindicatingmoreinvestorprotection

EconomicEconomicPolicyPrioritiesPolicyPriorities

Macroeconomicstabilisation/inflationdecreaseD

ConsistencyandpredictabilityofmacroeconomicpolicyD

D Preservationofsustainablelongtermgrowth: productivityincrease competitivenessgains CES t t ti l

D

CESexportpotential FDIattraction economymodernization industrialinnovativedevelopmentp

LoweringdependenceonexternalfinancingandexternaldebtreductionD

RisingproductivityefficiencyD

D10

PreservingsocialachievementsandhumancapitaldevelopmentD

MonetaryMonetaryPolicyObjectivesPolicyObjectives

GuidelinesLatestAchievements

Inflation rate decrease1 Inflation rate decrease1 Inflationreduction

FlexibleexchangeratemechanismbasedonmarketsupplyanddemandwithlimitedparticipationoftheNationalBank

Inflationratedecrease1 Inflationratedecrease1

Economicimbalancesreduction2 Economicimbalancesreduction2

Financialinstitutionsrefinancingonmarketconditions

Maintenanceofinflationadjustedpositivereal interest rates

Exchangeratestabilisation3 Exchangeratestabilisation3

Financialstabilitypreservation4 Financialstabilitypreservation4

InflationRateDecrease

realinterestratesy py p

InflationandRefinanceRateDynamicsin2012

106109 110107106 101

45,0 44,0

38 0

3344

48

61

80

92101

8169 66

56

39

38,0 36,0 35,0 33,3 31,6 30,7 30,2 30,0

11 13 1418

33 3123 22

Jan11 Apr11 Jul11 Oct11 Jan12 Apr12 Jul12 Oct12Inflation % YoY

22,818,0 18,0 20,4 19,2 21,6 15,6

27,6

15,621.6 20,4 16,8

Jan12 Mar12 May12 Jul12 Sep12 Nov12Inflation % MoM Refinance rate %*

Source:NationalStatisticalCommittee(http://belstat.gov.by/homep/ru/indicators/doclad/2012_12/12.pdf),NationalBank(http://www.nbrb.by/statistics/Dynamic/)*Annualizedinflationcalculatedasmonthlyratemultipliedby12 11

Inflation,%YoY Inflation,%MoM Refinancerate,%

MonetaryDisciplineMonetaryDiscipline

BYR/USDExchangeRate Dynamics Fullymarketablenationalexchangerate Interventionsmaybeconductedtomitigatesharp

currencyfluctuations

SinceOct11:ManagedFloating

Internationalreservesaresubjecttofurtherincreasebymeansof: Positiveforeigntradebalance FDIattraction Privatisation receipts

Jan09 Sep11:Peggingtocurrency

basket(RUR,EUR,USD)TheauthoritiesunifiedtheexchangerateandintroducedaflexibleexchangerateregimeinOctober2011.Sincemid2011theyhavealsopursuedfiscalandincomerestraintandtightenedmonetarypolicy These policies have restored FX markets reduced inflation

TheauthoritiesunifiedtheexchangerateandintroducedaflexibleexchangerateregimeinOctober2011.Sincemid2011theyhavealsopursuedfiscalandincomerestraintandtightenedmonetarypolicy These policies have restored FX markets reduced inflation

Jan08 Jul08 Jan09 Jul09 Jan10 Jul10 Jan11 Jul11 Jan12 Jul12 Jan13

InternationalReservesandM2Development

policy.ThesepolicieshaverestoredFXmarkets,reducedinflationandthecurrentaccountdeficit,andledtoanincreaseinreserves

Source:IMF,CountryReport12/113,May2012

policy.ThesepolicieshaverestoredFXmarkets,reducedinflationandthecurrentaccountdeficit,andledtoanincreaseinreserves

Source:IMF,CountryReport12/113,May2012

6000

8000

10000

12000

0

2000

4000

Jan 09 May 09 Sep 09 Jan 10 May 10 Sep 10 Jan 11 May 11 Sep 11 Jan 12 May 12 Sep 12 Jan 13

Source:NationalBank(http://www.nbrb.by/statistics/reserveAssets/assets.asp,http://www.nbrb.by/statistics/MonetaryStat/BroadMoney)*ForcalculatingmonthlyM2previousmonthlastworkdayexchangeratewasused 12

Jan09 May09 Sep09 Jan10 May10 Sep10 Jan11 May11 Sep11 Jan12 May12 Sep12 Jan13

InternationalReserveAssets,USDmn M2,USDmn*

BankingSectorBankingSector

Depositsbycustomertype*

BankingSectorhighlights*:

#ofbanks 32(27withforeigncapitalparticipation)

t USD 37 5 b (60 9% f GDP)

Loansbyborrowertype*

5% 1% assets USD37.5bn (60.9%ofGDP)

loans USD23.6bn (38.3%ofGDP)

deposits USD16.9bn (27.4%ofGDP)

capital USD 5.4 bn (8.9% of GDP)

12%

29%54%

%

46%

33%

20%

1%

capital USD5.4bn (8.9%ofGDP)

CAR 20.8%vs.8%regulatoryfloor

ROA 1.82% publicsectorprivatesectorindividuals

33%

publicsectorprivatesectorindividuals

CapitalAdequacyRatioandNPLRatio*

4 2% 3 5%4,2%

5,5%

BankingSectorRates

80%

nonbankinstitutions nonbankinstitutions

4,2% 3,5%,

36,2%

30,0%

40%

60%

19,8% 20,5%24,7% 20,8%

Dec09 Dec10 Dec11 Dec12

Capitaladequacy NPLRatio

0%

20%

Jan11Apr11 Jul11 Oct11 Jan12 Apr12 Jul12 Oct12 Jan13

Interbank market interest rate Refinancing rate p q y

Source:NationalStatisticalCommittee,NationalBank(http://www.nbrb.by/statistics/Dynamic,http://www.nbrb.by/statistics/PrStavkiN)*Asof31Dec.2012

Interbankmarketinterestrate Refinancingrate

13

PublicSectorBudgetPublicSectorBudget

RevenuesStructurein2012* ExpendituresStructurein2012*

Excise5.3%Oth 7 7%

Debtservicepayments4.2%Others7.1%

USD25.7 bn

Others7.7%

VAT21.3%Taxonprofit8.8%

Personalincometax9.2%

Ot e s . %

FSPP26.8%

Nationaldefense2.3%

Utilitiesandhousebuilding5.4%

Socialexpenditures6.3%

NationalUSD

25.8 bn 25.7bnNontaxrevenues9.0%

FSPP27.0%

Exportduties11.8%

Healthcare9.7%

Generalpublicexpenditures12.5%

Nationaleconomy13.0%

Education12.8%

25.8bn

PublicSectorBudget,%ofGDP

45,7% 46,4% 43 3%2,8%45,7%

41,5%

38,7%

40,7% 39,7%

, 43,3%35,9%

40,0% 39,6%

0,7%

1 8%

0,7% 0.1%

1,8%

2009 2010 2011 2012E 2013F

Revenue,%ofGDP Expenses,%ofGDP BudgetBalance

Source:MinistryofFinance*Asperbudgetlawfor2012Note:Totalsumexceeds100%duetostatisticaldiscrepancies

14

FiscalFiscalPolicyPolicyGuidelinesGuidelines

MacroeconomicstabilitytoremainthemaintargetoffiscalpolicyDExecutionofnondeficitalllevelsbudgetsDManageablepublicdebtlevelD

Budgetconsolidation: tighteconomyofbudgetorganisations

Dg y g g

limitationofpubliccapitalexpenditures containingrealwagegrowth(takingintoaccounttherealeconomicgrowth) increaseofrecoveryratefortheutilitiesandtransportservices t t t i th id i stateenterprisesrevenuegrowthamidrecoveringeconomy

Mediumtermfiscalceilings: Budgetdeficit 0% ofGDP PublicDebt upto45% ofGDP

WealsowelcometheGovernmentsdeterminationtobalancethebudgetin2012and2013,whichisconsistentwithstabilisation

DavidHofmanHeadoftheIMFMissioninBelarus,

October2012,IMFPressReleaseNo.12/402

WealsowelcometheGovernmentsdeterminationtobalancethebudgetin2012and2013,whichisconsistentwithstabilisation

DavidHofmanHeadoftheIMFMissioninBelarus,

October2012,IMFPressReleaseNo.12/402p

15

PublicPublicDebtDebt OverviewOverview Asof31.12.2012theexternalpublicdebtwas $12.0bn or19.0%ofGDP(vs.$11.8bn or20.1%ofGDPasof31.12.2011)

Externalpublicdebtraisingaimedateconomicpotentialdeveloping

Maincharacteristicsofexternalpublicdebt:

42.8% officialandmultilateral(IFI) loans**

shareofprojectfinancingloans 15.8%**

averagematurity 4.7years***

averageinterestrate 3.7%***

GrossPublicDebt*,%ofGDP

Legislativeceiling 45%Maastrichtcriterium 60%

ExternalandDomesticPublicDebt*,USD bn

1,92,1 3,0

2,0

18,1% 18,8% 24,9% 23,8% 24,0%

2009 2010 2011 2012 2013E

7,9 9,711,8 12,0 14,4

1,2,

2009 2010 2011 2012 2013E

ExternalPublicDebt*,%ofGDP

ExternalPublicDebt InternalPublicDebt

ExternalPublicDebtSpendings*, USDbn

16,4% 17,8%20,1% 19,0% 20,6%

, %

1,0 1,2 1,4 1,94,8

6,9 8,510,4 10,1

9,6

2009 2010 2011 2012 2013E

Source:MinistryofFinancecalculationsusing2011methodology*20092010datarecalculatedasperchangesinthemethodologyusedsince2011**Asof31.12.12***Asof30.11.12

, , ,

2009 2010 2011 2012 2013E

ProjectFinancing Nonbinding

16

ExternalDebtExternalDebtPortfolioPortfolio

Outstandingdebt,USDbn

IMF 3.03

A i i i d A C**

1 68

ExternalPublicDebtSourcesExternalDebtRecipients*

Monetaryauthorities1.3%

Nonfinancialsector44.0%

AnticrisisFundEurAsEC 1.68

IBRD 0.42

Bonds 1.80

Venezuela 0.32

Nuclear Power Plant***

0 09Public

th iti 38 8%B k 15 9% NuclearPower Plant 0.09

Chinese banks 1.62

USA(TCC) 0.04

Russia 3.00

Total 12.00

authorities38.8%Banks15.9%

External PublicDebtCurrencyStructure(asof31.12.2012)

ExternalPublicDebtTypes(asof31.12.2012)

Others 1.3%Others1.3%

SDR25.2%

EUR2.4%

Internationalcredits42.8%

Bonds15.0%

USD71.1%

Bilateralloans42.2%

Source:MinistryofFinancecalculationsasof31.12.2012,NationalBank* Asof30.09.2012,NationalBank**SignedcreditagreementforuptoUSD3 bnin6tranchestill2013.MembersofEurAsEC:Belarus,Kazakhstan,KyrgyzRepublic,Russia,Tajikistan,Uzbekistan;Observes:Armenia,Moldova,Ukraine.AnticrisisFundEurAsEC hereinafterreferredtoasACFEurAsEC*** SignedcreditagreementforuptoUSD10bn 17