Budget deficit as the main risk for Belarus’ financial stability in 2016
The enlarged Board meeting of the National Bank last week recognised high fiscal risks as the main threat to the financial stability in Belarus. In H1 2016, income tax revenues in the state budget totalled 30% of the projected volume and revenues from foreign operations only 42% of the annual target. The authorities are likely to step up pressure on financially successful enterprises and force them to increase contributions to the state budget. In addition, they may introduce new additional payments for SMEs at the local level, reduce subsidies to local budgets, and stream financial assistance only to key areas. If by the year-end the state budget has a sharp deficit in tax revenues, the authorities may issue securities in order to balance out the budget, which, however, is likely to increase the public debt servicing costs in the coming years.
The Belarusian authorities regard the Catholic conference as yet another international event to promote Minsk as a global negotiating platform. Minsk’s proposal to organise a meeting between the Roman-Catholic Church and the Russian Orthodox Church is rather an image-making undertaking than a serious intention. However, the authorities could somewhat extend the opportunities for the Roman-Catholic Church in Belarus due to developing contacts with the Catholic world.
Minsk is attempting to lay out a mosaic from various international religious, political and sportive events to shape a positive image of Belarus for promoting the Helsinki 2.0 idea.
Belarus’ invitation to the head of the Holy See for a meeting with the Patriarch of the Russian Orthodox Church should be regarded as a continuation of her foreign policy efforts in shaping Minsk’s peacekeeping image and enhancing Belarus’ international weight. The Belarusian authorities are aware that their initiative is unlikely to find supporters among the leadership of the Russian Orthodox Church in Moscow. In Russia, isolationist sentiments prevail.
In addition, for domestic audiences, the authorities make up for the lack of tangible economic growth with demonstrations of growth in Minsk’s authority at international level through providing a platform for religious, sportive and other dialogues.