Page 65 - Eastern Europe Outlook 2020

in a note. “Belarus has been one of the few countries in the region with a consistent fiscal surplus, and its public debt and external debt are close to peers’ median (c. 43% and 66% of GDP, respectively).”
If the pressure is on Belarus could for the first time turn to deficit spending funded by external credits – Russia in the first place and the IMF in the last place.
In 2018-2020, state budget revenue targets have remained virtually unchanged, while expenditure is set to increase by 14% and 13% y/y in 2019 and 2020, respectively. In the 2020 state budget, 11% of expenditure falls on debt service (debt repayments, which are not reflected as expenditure, are twice as high); although this is lower than in 2019 (13%), it remains the largest expense item.
The government has been trying to pay down its external debt and this year it planned to only refinance 75% of its debt using export revenues to pay off the remaining portion. The Ministry of Finance had intended to continue this policy in 2020 but said if there is no compensation from Russia one option is refinance 100% of this debt to buy time.
The authorities plan to reduce the deficit in 2021 and 2022, reaching a balanced budget in 2023.
According to Rencap projections, state budget expenditure should decline from 18.5% of GDP in 2020 to 17.7% and 17.5% in 2021 and 2022, while the deficit should be significantly reduced, reaching 0.2% and 0.1% respectively.
5.0 ​Markets Outlook
65​ EASTERN EUROPE Outlook 2020​ ​ ​www.intellinews.com