Belarus finds itself on the verge of a debt trap – Charter’97 :: News from Belarus – Belarusian news – News from Belarus – Republic of Belarus
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Panic broke out at the Ministry of Finance.
Belarusian officials admit that the national debt has become a serious problem for the economy. Next year Minsk will borrow about $ 2.3 billion, which they intend to spend on repayment of external financial obligations. udf…
Let us remind you that earlier the World Bank noted that the prospects of the Belarusian economy depend on the possibilities of refinancing the state debt. At the same time, the Ministry of Finance stated that significant sums are being spent on repayment and servicing of the external public debt this year. For example, in the first quarter, it took almost $ 900 million.
Officials note that over the years there has been a significant increase in public debt, especially external debt. According to the Ministry of Finance, at the beginning of 2014 the national debt was 15.4 billion rubles (21.6% of GDP), at the beginning of 2016 – almost 32.9 billion (31.4%), at the beginning of 2018 – almost 42, 2 billion (39.1%), and at the beginning of this year – almost 57.8 billion (37.3%). Let’s remind that the admissible limit on the national debt is 40% of GDP.
Over the past year, the national debt has grown by 29% (or 13 billion rubles). Among the reasons are the weakening of the Belarusian ruble and over-planned borrowings, which are specified in the Ministry of Finance.
At the beginning of this year, the dollar accounted for 79.2% of the total public debt (a year earlier – 79.7%). But in 2020, the shares of the Russian ruble and the Chinese yuan have grown in the currency structure of the national debt.
Earlier, the Ministry of Finance reported that in 2020 the department managed to reduce the cost of attracting foreign exchange resources, as well as lengthen the terms of borrowing in the domestic financial market. According to the ministry, the average interest rate on external borrowing last year was 4% per annum, and on domestic currency – 4.7%.
“At the same time, the portfolio of public debt is such as liquidity” (in 2022, 97% of payments on repayment and servicing of public debt are to be fulfilled this year, 3.6 billion debt causes a rather tight schedule of payments in the coming period (about $ 3-3.5 billion annually in 2022-2024), “the officials note.
According to them, about 10% of the republican budget revenues are directed only to servicing the state debt.
“Repayment is carried out through refinancing. The debt spiral is growing, in fact, Belarus is on the verge of a debt trap, when it will be necessary to attract funds not only to refinance the debt, but also to service it, – the officials specify in the draft forecast. – A restraining factor in the development of an excess of growth rates in servicing public debt over the growth rates of the budget.
Earlier, the World Bank noted that the prospects for the Belarusian economy depend on refinancing opportunities due to a significant number of government debt payments ($ 2.4 billion in 2022 and $ 3.3 billion in 2023).
“Issuance of bonds to Russian markets is one of the options, since access to the EU financial markets is limited by sanctions,” experts say.
Experts from Costa Urada also spoke about difficulties in new borrowing due to the sanctions.
According to statistics, officials are reducing spending on social services, but increasing spending on national activities, which include servicing the state debt, spending on government officials, and interbudgetary transfers.