Page 24 - BELRptMar19

6.0 Public Sector 6.1 Budget
The surplus of the central state budget reached BYN4.7bn ($2.2bn) in 2018 , according to the Finance Ministry reports BelTA .
Revenues of the central state budget totalled BYN24.4bn or 100.6% of the revised annual target. Proceeds from VAT amounted to BYN10.6bn (99.9% of the target), profit tax – BYN3.3bn (101.5%), excise duties – BYN2.6bn (100.8%). Revenues from foreign trade operations totalled BYN5.5bn (100.4%).
In 2018 the central state budget spent BYN19.7bn (93.9%). As much as BYN8.2bn (88.4%) was spent on nationwide activities, BYN4.8bn (95.4%) on financing the national economy, BYN14.3bn (98.5%) on financing the social sphere (social policy, education, healthcare, physical training, sport, culture, and mass media).
The surplus of the state administration sector budget totalled BYN4.9bn in 2018. Revenues made up BYN50.8bn, or 100.7% of the revised annual target.
Expenses stood at BYN45.9bn, or 96.5%. The surplus of the Social Protection Fund budget reached BYN0.3bn, that of the Universal Service Fund – BYN12.4mn, the Civil Aviation Fund – BYN1.2mn, the Punishment Execution Department Fund – BYN0.9mn. As of 1 January 2019 arrears on tax and duty payments stood at BYN167mn.
The budget is almost in balance. Fitch's measure of general government balance (consolidated government including Social Protection Fund and off balance sheet expenditure related to guarantees and financial sector transfers) is estimated to have recorded a near-balanced position at -0.1% of GDP in 2017. This estimate incorporates a consolidated government surplus of 2.4% of GDP reflecting a combination of revenue growth derived from higher oil prices and a more dynamic economy and continued expenditure restraint.
Fitch expects the general government to record low deficits of 0.8% and 1.2% of GDP in 2018 and 2019, respectively, reflecting lower surpluses at the consolidated level plus potential cost related to the materialisation of guarantees, banking sector capitalisation and the asset clean-up process. We forecast the "augmented deficit", which includes off-budget programme lending - adding to government debt - to be a little higher at 1.8% of GDP in 2018.
Fitch estimates that government debt (including guarantees) rose to 55.7% of GDP at end-2017 , still below the 'B' median. Belarus's debt is highly exposed to currency volatility (90% is FC-denominated), and interest rate risk (50% floating rate). Fitch includes government guarantees, estimated at 10.1% of GDP, in its total debt calculations, due to the high likelihood that the government will need to meet state-owned enterprises' repayment obligations.
24 BELARUS Country Report March 2019 www.intellinews.com