Page 24 - BELRptDec18

6.2 Debt
Belarus - Gross external debt 2011 2012 2013 2014 2015 2016 2017
Gross external debt (USD bn) 131,628 133,602 145,982 160,653 152,642 152,327 155,443
Gross external debt (% GDP)
53.0 54.6 50.7 51.9 58.1 76.1 74.8
Source: CEIC
Belarus intends to reduce the state debt to 25% of the country's GDP by 2025, Belarusian Finance Minister Maksim Yermolovich said on 26 November. The official said: “As far as the state debt is concerned, as early as this year we will start honoring a number of commitments ahead of time in order to gradually reduce the debt burden in 2019 and 2020. We've decided on a trajectory for reducing the state debt in comparison with the GDP – down to 25% by 2025. It is half of what the economic security threshold is today. At the end of this year we will have a state debt as large as 38-39% of the GDP.”
As of 1 October Belarus' state debt totalled BYN44.6bn, BYN2.4bn or 5.7% up from the beginning of the year . The internal state debt amounted to BYN9.6bn. Taking into account differences in currency exchange rates, the internal state debt increased by BYN456.2mn or 5% from the beginning of the year. As of 1 October 2018 Belarus' external state debt totalled $16.5bn, down by $183mn (taking into account differences in currency exchange rates) or 1.1%.
Near-term external financing risks have declined due to the pre-financing in 2017 of payments due in 2018 through market and official borrowing, and due to an increase in international reserves.
FX debt service is $2.6bn (not including Eurobond payment) in 2018,
which will be covered by a mix of multilateral financing, local market issuance, use of FX cash buffers and potentially a new international bond issuance. FX liquidity in the local market and FX government revenues derived from custom duties and trade of oil products further mitigate near-term financing risks.
Belarus's gross external financing requirement (current account deficit plus medium- and long-term amortisations) has declined to 101% of international reserves, from a previous peak of 223% in 2014.
Sustained reduction in refinancing risks will depend on continued progress on diversifying external financing sources , refinancing opportunities of Russian bilateral debt and development of the local market. The next Eurobond amortisation is not until 2023.
Who is buying Belarusian eurobonds?
Belarus tapped the international debt market on February 21 for the first time this year with a new $600mn issue of 12-year Eurobond with 6.2% coupon following January's drop in the nation's foreign exchange reserves by $838mn, or 11.5% month-on-month, to $6.477bn.
24 BELARUS Country Report December 2018 www.intellinews.com