Budget 2013: an attempt to fulfill the impossible

April 22, 2016 18:21

Draft 2013 budget is based on inflated figures and the Belarusian economy will be unable to fulfill it without money printing. Departure from the tight monetary policy could provoke yet another loop of problems in the currency market, difficult to solve in the view of the foreign debt payments.

On November 3rd, 2012 the 2013 National Budget Law was published.

The initial parameters for the 2013 Budget forecast are unrealistic. GDP growth is projected at 108.5%. In January-September 2012 GDP growth was 2.5% with a downward trend. Businesses’ debts during the liquidity deficit period have increased significantly, which has suspended the core investment process.

The 2013 forecast for the export of goods and services growth - 115.2% of 2012 - seems unduly optimistic. Record high levels of exports in mid-2012 are unattainable in the near future, which is confirmed by the foreign trade statistics for January-September.

Consolidated budget for 2013 is balanced. Revenues and expenses are projected at BYR 197 trillion, which is 26.8% higher than the projection for 2012. The estimated inflation rate, 12%, implies a substantial increase in revenues will not be due to inflation, but at the expense of the real sector, which should significantly increase labour production in the absence of clear sources of funding for modernization.

As in previous years, substantial funding is envisaged for state agricultural programmes. In 2013, the amount budgeted for agriculture (more than BYR 15.5 trillion from the state budget and BYR 15.5 trillion from loans) will exceed BYR 31 trillion, or about USD 3.5-3.6 billion. Against the background of increased competition in the Russian agricultural market, refund risks are clearly underestimated, given the significance of the funds invested in the development of agricultural enterprises.

Thus, the Belarusian economy is faced with a choice. It will not be able to execute the projected budget without money printing. And the latter may result in a growing imbalance in the economy. The government is trying to focus on qualitative indicators, while the final decision will depend on the supreme authority.

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The Belarusian authorities have launched a discussion on the moratorium or abolition of the death penalty under the pressure of Belarusian human rights activists and international community. Apparently, the authorities are interested in monitoring public sentiments and response to the possible abolition of the capital punishment. The introduction of a moratorium on the death penalty would depend on the dynamics in Belarusian-European relations, efforts of the civil society organisations and Western capitals.

In Grodno last week, the possibility of abolishing the death penalty in Belarus or introducing a moratorium was discussed.

The Belarusian authorities are likely to continue to support the death penalty in Belarus. During his rule, President Lukashenka pardoned only one person, and courts sentenced to death more than 400 people since the early 1990s. Over the past year, Belarusian courts sentenced to death several persons and one person was executed.

There are no recent independent polls about people’s attitude about the death penalty in Belarus. Apparently, this issue is not a priority for the population. In many ways, public opinion about the abolition of the death penalty would depend on the tone of the state-owned media reports.

That said, the Belarusian Orthodox Church and the Roman-Catholic Church stand for the abolition of the capital punishment, however their efforts in this regard only limit to public statements about their stance. Simultaneously, the authorities could have influenced public opinion about the death penalty through a focused media campaign in the state media. As they did, for example, with the nuclear power plant construction in Astravets. Initially unpopular project of the NPP construction was broadly promoted in the state media, and eventually, according to independent pollsters, was accepted by most population.