PRESENTATION OF THE REPUBLIC OF BELARUS

February 2013

BelarusOverview
GeographicalPosition
Estonia Sweden Denmark Latvia Lithuania Minsk Russia

KeyIndicators(2012)
Area Population Currency(asof30.01.2013) Creditratings(M/S&P) GDP,USDbn GDPgrowthyoy GDPp percapita, p ,USDthsd Foreigntradeturnover,USDbn*9M2012 Industrialproduction, %ofGDP Inflation BudgetRevenues,USDbn Budget g Expenditures, p , USDbn BudgetBalance,%ofGDP 207,595 km 9.46mn BYR,1USD=8,650BYR B3 (Neg.)/B (Stab.) 63.0 1.5% 6.7 70.9 31.8% 21.8% 25.8 25.7 0.7% 23.8% 19.0%
2

Belarus
G Germany Poland Ukraine

CzechRep. Slovakia Moldova Austria Hungary Romania Switzerland Slovenia Croatia It l Italy Serbia BiH Bulgaria Montenegro Macedonia

Turkey

Publicdebt,%ofGDP Externalpublicdebt,%ofGDP

KeyHistoricalEvents
SigningtheTreatyon EstablishingtheUnionState ofBelarusandRussia AgreeingonaUSD3.5bn IMFSBAprogram CreationoftheCustoms UnionofBelarus, KazakhstanandRussia CreationofaCommon EconomicSpaceofBelarus, KazakhstanandRussia

Independence

1991
Membershipin theCIS,IMFand WorldBank

1997

2000

2007

2009

2010

2011

2012

2014
WorldHockey championship inMinsk

CreationoftheEurAsEC (Belarus,Russia,Kazakhstan, Kyrgyzstan Tajikistan) Kyrgyzstan,

Acquiringcredit ratingsissuedby S&P and Moody Moodys s

DebutEurobond AgreeingonaUSD3.0bn ACFStabilisation USD1.0bnissue Program

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

InvestmentHighlights
Welldiversifiedeconomywith focusonindustrialproduction

Improvingbusiness environmentandincreasing competitiveness

Oneofthemostqualified laborforceinEasternEurope

Effectivemacroeconomic and budgetarypolicies

Activeforeigntradeplayer

Ability ytoabsorbexternalturbulence:

Managedfloatingexchangerate mechanism Internationalreservesincrease

2

CreditMetricsComparison
GDPperCapita,USDthsd
48 4,8 4,4 3,1
MedianBB Belarus MedianB MedianB MedianBB Belarus

PublicDebt,%ofGDP
40,6 38 0 38,0 35,5

BudgetBalance,%ofGDP
05 0,5 3,1

GrossExternalDebt,%ofcurrentaccountinflows
93,3 83,4 4,2
Median ed a B Median ed a BB Belarus e a us

77,4

Belarus

MedianBB

MedianB

RatingUpgradeTriggers

sustainedimprovementincompetitiveness diversification offunding sources increasedavailabilityofforeignexchange improvementinexternalbalances MAY30,2012,StandardandPoors

BelarusfiscalmetricshaveappearedstrongrelativetoitsBrated peers.Itsfinancialbalancehas,since2002,consistentlyplacedit inthetophalfamongthe24currentlyBratedcountries Belarusseconomicstrengthbasedonthecountrysrelativelyhigh averageannualrealgrowthrate,adiversifiedindustrialsectorand highlevelsofpercapitaincome,whicharereflectedinaworkforce thatisgenerallywelleducatedand,thankstolowunemployment, maintainsstrongjobrelatedskills JULY4 4,2012 2012,M Moodys, d C Credit ditA Analysis l i

Source:SovereignRiskIndicators(S&P,December2012)basedon2012E

CreditMetricsComparison
GDPperCapita,USDthsd
4,4 05 0,5 2,4 Belarus 6thgroup(median) 35,5 45 1 45,1

Gen.Gov.Balance,%ofGDP

PublicDebt,%ofGDP

Belarus

6thgroup(median)

4,1 41

Belarus

6thgroup(median)

Currentaccountdeficit,%ofGDP

Int.Reserves,monthsof po ts imports
3

GrossExternalDebt,%of currentaccountinflows

Belarus

6thgroup(median)

77,4

97,5

5,2 8,4 Belarus 6thgroup(median) Belarus 6thgroup(median)

Source:SovereignRiskIndicators(S&P,December2012)basedon2012E

MacroeconomicOverview
CPI,%YoY
120 100 80 60 40 20 0 2009 2010 2011 13,1% 21,8 2012 2009 15,0% 2010 2011 9M2012 2009 2010 2011 2012 8,7% 5,652 5,031 0,3% 0 3%

Current Account Balance, %ofGDP

For.ReserveAssets,USDmn
7,916 8,095

PublicSectorBudget g Balance, , %ofGDP

3,0% 0,7% ,

GrossExternalDebt,%ofGDP
62,3% 45,1% 51,6% 58,6%

Theauthoritiestighteningofeconomic policiesfromlate2011wassuccessfulin reducinginflationandstabilising theforeign exchangemarketduringthefirsthalfof 2012 DavidHofman Source:IMF,PressRelease 12/402, October2012

0,7%

1,8% 2009 2010 2011 2010 2011 2012 30Sept. 2012

2009

Source:NationalStatisticalCommittee, NationalBank,MinistryofFinance

EconomicGrowth
 

Developedanddiversifiedindustrialproduction Strongmarketpositionsinthefollowingindustries:

RealGDPGrowth,%YoY
7,7 5,5

potashfertilizer harvestmarket heavytruckmarket tractormarket

0,2 2009 2010

15 1,5

Majorforeigntradepartners:Russia,EUand Asia/Africa

2011

2012E

AverageNominalMonthlyWages,USD
***

DecompositionofGDPGrowth**,%
1,8 425 8 425,8
***

406,6 350,2
***

0,5

0,5

0,4

0,1

339,0

***

0,6 Industry Agriculture/Forestry Construction Other 1,2 12 Transportandcommunication Nettaxesonproducts Tradeandcatering

2009

2010

2011

9M2012 *

Source:NationalStatisticalCommittee,MinistryofEconomy *Without Wi h taking ki i intoaccountprivate i small llsize i enterprises i **In2012.http://belstat.gov.by/homep/ru/indicators/pressrel/gdp_rgdp.php ***Thedollar equivalentiscalculatedaccording totheNationalStatistics CommitteemethodologywhichusestheweightedaveragerateoftheBelarusianrubleagainst thedollarinallsegmentsoftheforeignexchangemarket(publishedonthewebsiteoftheNationalBankofBelarus:2009:1USD=2,803.27BYR; 2010:1USD=2,993.74BYR;2011:1USD=5,605.84BYR)

Investments
FixedCapitalInvestments
60 50 40 30 20 10 0 10 20 30 40 Jan10 3500 3000 2500 2000 1500 1000 500 0 Jul10 Jan11 Jul11 Jan12 Jul12 Nominalinvestments(USDmn) Realinvestmentsgrowth(%YoY,RHS)

LendingunderGovernment Programs,%ofGDP
21,5% 12,5% 3,8%

2010

2011

2012E

FixedCapitalInvestmentsStructure bySources,%
14,0 35,8 16,7 , 26,1 Others

FixedCapitalInvestmentsStructure bySectors,%
Others 31,1 30,4 Construction

Bankingloans

11,0 13,0

12,7 15,6 34,5

Tradeandcatering Transportand communication Agriculture/Forestry Industry

37,8 12,4 2011

41 1 41,1

O funds Own f d 38,4

16,1 2012

Fundsofthe consolidatedbudget 2011 2012

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

ForeignTrade
CurrentAccountBalance,USDmn
6000 4000 2000 0 2000 4000 6000 8000 10000 2009 2010 2011 9M2011 9M2012

Export/ImportFXFlows,USDmn
60000 40000 20000 0 20000 40000 60000 2009 2010 2011 9M2011 9M2012 Netflows

Secondaryincome Tradebalance

PrimaryIncome Currentaccountbalance

Importpayments

Exportinflows

ImportedEnergyPrices
300 250 200 150 100 50 0 45,0 2009 40,4 56,1 53,8 187,6 147,8 165,6 265,5

CESExportOpportunities
CompliancewithWTOprinciples Integratedoil,gasandtelecommarket F movement Free tof fcapital it land dworkforce kf Coordinationofmacroeconomicandindustrialpolicy, unificationofexchangearrangements  Technicalregulation  Commonprinciplesofregulationinthefieldofprotection anddefenseofintellectualpropertyrights, etc.  Catalystforreforms,competitivenessdevelopment and dsustainable i bl policy li mix i
   

2010 2011 2012 Importedgasprices(USD/1000cubicm) Importedoilprices(USD/barrel)*

TheCustomsUnionofRussia,BelarusandKazakhstanisthefirstsuccessful exampleinregionaleconomicintegrationbetweencountriesoftheformer SovietUnion.Potentiallytheunioncanbringfurtherbenefitssuchas improvedcrossborderinfrastructureandstrengthenedinstitutions S Source: EBRD EBRD,T Transition iti R Report t2012 IntegrationAcrossBorders,November2012

Source:NationalStatisticalCommittee,NationalBank,MinistryofEconomy *Exchangerateusedforconvention:7.28barrels perton

ExternalCapitalFlows
CapitalAccount,USDmn
4000 2000 0 2000 4000 6000 8000 2009 2010 2011 9M2011 9M2012 2009
FDI(USDbn)

FDIInflow
39 3,9 2,6 6,6

4,0 1,9 , 2,7 1,1 1,4 2010

Privatizationreceipts(USDbn)

0,7 2011
FDI/GDP(%)

Portfolioinvestments Otherinvestments

Derivatives Directinvestments

InvestorProtectionRanking*
Country New Zealand Singapore Hong Kong Kazakhstan Rank2013 #1 #2 #3 #10 2013/2011 RankChange g (#1) (#2) (#3) 34(#44)

FDIInflowby Countries,% asof9M2012

Russia48.0% Other13.6% USA1.2% Cyprus4.4% UK32.8%

Belarus
RussianFederation Ukraine

#82
#117 #117

27 (#109)
24 (#93) 6 (#109)

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

EconomicPolicyPriorities
D D D
Macroeconomicstabilisation/inflationdecrease Consistencyandpredictabilityofmacroeconomicpolicy Preservationofsustainablelongtermgrowth:

productivityincrease competitivenessgains CESexport tpotential t ti l FDIattraction economymodernization industrialinnovativedevelopment p

D D D

Loweringdependenceonexternalfinancingandexternaldebtreduction Risingproductivityefficiency Preservingsocialachievementsandhumancapitaldevelopment

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MonetaryPolicyObjectives
LatestAchievements 1 2 3 4 Inflationratedecrease Economicimbalancesreduction Exchangeratestabilisation Financialstability ypreservation p Guidelines
Inflationreduction Flexibleexchangeratemechanismbased onmarketsupplyanddemandwithlimited participationoftheNationalBank Financialinstitutionsrefinancing onmarketconditions Maintenanceofinflationadjustedpositive realinterestrates

InflationRateDecrease
109 110 107 106 101 106 92 81 80 61 44 33 11 13 14 18 48 69 66 56 39 31 23 22

InflationandRefinanceRateDynamicsin2012
45,0 44,0 38 0 38,0 36,0 35,0 33,3 31,6 30,7 30,2 30,0

22,8

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

27,6 15,6

21.6 20,4

16,8

Jan11 Apr11 Jul11 Oct11 Jan12 Apr12 Jul12 Oct12 Inflation %YoY Inflation,

Jan12

Mar12 May12 Inflation*%MoM Inflation,

Jul12

Sep12 Nov12 Refinancerate rate,%

Source:NationalStatisticalCommittee(http://belstat.gov.by/homep/ru/indicators/doclad/2012_12/12.pdf),NationalBank(http://www.nbrb.by/statistics/Dynamic/) *Annualizedinflation calculatedasmonthlyratemultiplied by12

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MonetaryDiscipline
BYR/USDExchangeRate Dynamics
Fullymarketablenationalexchangerate Interventions maybeconductedtomitigatesharp currencyfluctuations  Internationalreservesaresubjecttofurtherincrease bymeansof: Positiveforeigntradebalance FDIattraction Privatisation receipts
 

SinceOct11: Managed Floating

Jan09 Sep11: Peggingtocurrency basket(RUR,EUR,USD)

Jan08 Jul08 Jan09 Jul09 Jan10 Jul10 Jan11 Jul11 Jan12 Jul12 Jan13

Theauthoritiesunifiedtheexchangerateandintroducedaflexible exchangerateregimeinOctober2011.Sincemid2011theyhave alsopursuedfiscalandincomerestraintandtightenedmonetary policy ThesepolicieshaverestoredFXmarkets, policy. markets reducedinflation andthecurrentaccountdeficit,andledtoanincreaseinreserves Source:IMF,CountryReport12/113,May2012

InternationalReservesandM2Development
12000 10000 8000 6000 4000 2000 0 Jan09 May09 Sep09 Jan10 May10 Sep10 Jan11 May11 Sep11 Jan12 May12 Sep12 Jan13 InternationalReserveAssets,USDmn M2,USDmn*

Source:NationalBank(http://www.nbrb.by/statistics/reserveAssets/assets.asp,http://www.nbrb.by/statistics/MonetaryStat/BroadMoney) *Forcalculating monthlyM2previousmonthlastworkdayexchangeratewasused

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BankingSector


BankingSectorhighlights*: #ofbanks 32(27withforeigncapitalparticipation) assets t USD37 37.5 5bn b (60.9% (60 9%of fGDP) loans USD23.6bn (38.3%ofGDP) deposits USD16.9bn (27.4%ofGDP) capital USD5.4bn (8.9%ofGDP) CAR 20.8%vs.8%regulatoryfloor ROA 1.82%

Deposits bycustomertype*
5% % 12% 29% 54%

Loans byborrowertype*
1% 20% 46% 33%

publicsector privatesector individuals nonbankinstitutions

publicsector privatesector individuals nonbankinstitutions

BankingSectorRates
80%

CapitalAdequacyRatioandNPLRatio*
5,5% 4 2% 4,2% 3 5% 3,5% 4,2% ,

60% 40% 20% 0% Jan11 Apr11 Jul11 Oct11 Jan12 Apr12 Jul12 Oct12 Jan13 Interbankmarketinterestrate Refinancingrate
36,2% 30,0%

19,8%

20,5%

24,7%

20,8%

Dec09

Dec10 Capital p adequacy q y

Dec11

Dec12 NPLRatio

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

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PublicSectorBudget
RevenuesStructurein2012*
Oth 7.7% Others 7 7% Taxonprofit8.8% Personalincome tax9.2% Nontaxrevenues 9.0% Excise5.3% VAT21.3%

ExpendituresStructurein2012*
Others Ot e s7.1% . % National defense2.3% Social expenditures6.3% Healthcare9.7% Generalpublic expenditures12.5% Debtservice payments4.2% Utilitiesand housebuilding5.4% FSPP26.8%

USD 25.8bn

FSPP27.0% Exportduties11.8%

USD 25.7bn

National economy13.0% Education12.8%

PublicSectorBudget,%ofGDP
45,7% 46,4% , 41,5% 43 3% 43,3% 38,7% 0,7% 1,8% 1 8% 2009 2010 Revenue,%ofGDP 2011 Expenses,%ofGDP 2012E BudgetBalance 2013F 2,8% 35,9% 40,7% 40,0% 0,7% 39,7% 39,6% 0.1%

Source:MinistryofFinance *Asperbudgetlawfor2012 Note:Totalsumexceeds100%duetostatisticaldiscrepancies

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FiscalPolicyGuidelines
D D D D
Macroeconomicstabilitytoremainthemaintargetoffiscalpolicy Executionofnondeficitalllevelsbudgets Manageablepublicdebtlevel Budgetconsolidation: tight g economy yofbudget g organisations g limitationofpubliccapitalexpenditures containingrealwagegrowth(takingintoaccounttherealeconomicgrowth) increaseofrecoveryratefortheutilitiesandtransportservices state t t enterprises t i revenuegrowth thamid idrecovering i economy

Mediumtermfiscalceilings:

Budgetdeficit 0% ofGDP PublicDebt up pto45% ofGDP

WealsowelcometheGovernmentsdeterminationtobalance thebudgetin2012and2013,whichisconsistentwithstabilisation DavidHofman HeadoftheIMFMissioninBelarus, October2012,IMFPressReleaseNo.12/402

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PublicDebt Overview
  

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
Maastrichtcriterium 60% Legislativeceiling 45%

ExternalandDomesticPublicDebt*,USD bn
2,1 11,8 3,0 12,0 2,0 14,4

1,2 18,1% 2009 18,8% 2010 24,9% 2011 23,8% 2012 24,0% 2013E 7,9 2009

1,9 , 9,7 2010

2011

2012

2013E

ExternalPublicDebt

InternalPublicDebt

ExternalPublicDebt*,%ofGDP
16,4% , % 17,8% 20,1% 19,0% 20,6%

ExternalPublicDebtSpendings*, USDbn

9,6 6,9 2009 2010 2011 2012 2013E 1,0 , 2009 8,5 10,4 10,1 1,9 2012 Nonbinding 4,8 2013E

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

1,4 , , 1,2 2010 2011 ProjectFinancing

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ExternalDebtPortfolio
ExternalDebtRecipients*
Nonfinancial sector44.0% Monetary authorities1.3%

ExternalPublicDebtSources
Outstandingdebt,USDbn IMF A icrisis Anti i i Fund dEurAsEC A C IBRD Bonds Venezuela NuclearPower Plant Chinese banks USA(TCC) Russia Total
*** **

3.03 1 68 1.68 0.42 1.80 0.32 0 09 0.09 1.62 0.04 3.00 12.00

B k 15.9% Banks 15 9%

Public authorities th iti 38.8% 38 8%

External PublicDebtCurrencyStructure (asof31.12.2012)

Others1.3% EUR2.4% SDR25.2% USD71.1%

ExternalPublicDebtTypes (asof31.12.2012)
Bonds15.0% International credits42.8%

Bilateralloans42.2%

Source:MinistryofFinancecalculationsasof31.12.2012,NationalBank * Asof30.09.2012,NationalBank **SignedcreditagreementforuptoUSD3 bnin6tranchestill 2013.MembersofEurAsEC:Belarus,Kazakhstan,KyrgyzRepublic,Russia, Tajikistan, Uzbekistan; Observes:Armenia,Moldova,Ukraine.AnticrisisFundEurAsEC hereinafterreferredtoasACFEurAsEC *** SignedcreditagreementforuptoUSD10bn

17