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The country’s budget deficit, inflation turned out to be higher than projected, and public debt is growing. Belarus, October 30, 2020

The winter is coming, so is the end of the year. Today, the Ministry of Finance summed up the results of 9 months, and it turned out that the republican budget was executed with a serious deficit. The National Bank predicts that the inflation target for 2020 will not be met. The country’s national debt continues to grow. And the IMF predicts that Belarus is unlikely to restore the economy to the level of 2013 in the next 5 years.

National Bank admits that inflation target will not be achieved

The National Bank admitted that annual inflation has increased to 6.1% in the third quarter, with the target set for the current year of no more than 5%.

Since the days of the USSR, Belarus has been using an economic system called a planned economy. It obliges all business entities to act following a centralized economic plan for five years, for a year, for a quarter and each month. So, the target of such a plan for 2020 on inflation will not be achieved. This is a normal practice. Plans are rarely fulfilled because they are set optimistically.

The main factors behind the acceleration of inflation were the weakening of the national currency, so as the growing inflationary and devaluation expectations. According to the National Bank, the pressure on the foreign exchange market affected the dynamics of free prices in the consumer market.

Budget deficit is growing again

The Ministry of Finance executed the republican budget for 9 months with a deficit of 1.8 billion rubles. Right now, it is equivalent to $683 million.

The revenues of the republican budget amounted to 16.3 billion rubles ($6.1 billion and 64.1% of the annual plan). Expenses amounted to 18.1 billion rubles ($6.8 billion and 65.7% of the plan).

Earlier it was reported that the deficit of the republican budget for the period from January to August decreased to 1.5 billion rubles from 1.8 billion at the end of the half-year.

National debt grew by 27% in 9 months

The state debt of Belarus as of October 1 amounted to 56.9 billion rubles ($21.6 billion), having increased from the beginning of the year by 27%, or by 12.1 billion ($4.5 billion).

The external public debt from January to September, taking into account exchange rate differences, increased by $0.4 billion, or 2.6%, and is now $17.6 billion.

In 9 months of this year, Belarus attracted foreign loans in the equivalent of $1.9641 billion, including $1.3915 billion from bonds placed in foreign markets, $432.2 million from the government and banks of Russia, $81.8 million from the Export-Import Bank of China, $50.9 million from the IBRD, and $7.7 million from the EBRD and NIB.

$1.3233 billion was allocated to repay the external public debt from January to September.

Since the beginning of the 2010s, the country’s external debt has grown very rapidly. By 2020, the ratio of public debt to GDP is at the global average of about 50%.

IMF predicts that Belarus will not be able to restore the economy to the level of 2013 in the next 5 years

The volume of Belarusian GDP in current prices, according to the International Monetary Fund, will grow from the expected $57.71 billion in 5 years only to $70.48 billion, that is, by 22.1%. Such data are provided in the October study of the IMF.

During this time, global GDP will increase by 35.7%, and by 45.7% in emerging market countries.

At the same time, GDP per capita in Belarus will grow from $6,130 to $7,680, that is, by a quarter, while in the world it’ll increase by 28.9%.

Thus, even in 5 years, Belarus will not be able to restore the volume of the economy to the level of 2013 and 2014. At the same time, the gap in the size of per capita GDP in comparison with developed countries will not change and will remain 7.6 times.

In this section you will find information about Belarus. Professional journalists from the independent non-state publication officelife.media (location - Minsk) tell about what is really happening in Belarus. No political accents or ideological attitudes. Only the most important facts so that you understand the essence of what is happening in this corner of Europe.