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In 2009 Belarus may lose all its reserves

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In 2009 Belarus may lose all its reserves

Belarus is torrentially increases its external debts, due to which foreign trade deficit is financed. Such an economic policy can lead our country to a catastrophe.

As an economy reviewer of “Belorusy i rynok” newspaper Uladzimir Tarasau writes, if negative tendencies in the foreign trade of Belarus won’t be overcome successfully, in 2009 the country can lose almost all its reserves.

The newspaper reminds that another tranche of the Russian loan of $500 mln was received on March 12 by the Finance Ministry. The same sum should be transferred after amendments to the Russian budget-2009 would be made. After that extension of the stabilization loan of $2 billion on which Belarusian and Russian leaders agreed last year, would be finished.

The money would be added to the gold and currency reserves of the country, which was equal to $3,814 mln on March 1. However, money won’t stay there long, as at the moment the National Bank has to spend its resources for satisfying the demands of the population for currency.

In the next few months money would be primarily needed for financing deficit of the foreign trade of the county. In January this year, according to the preliminary information of the National Bank of Belarus, foreign trade balance was minus $293.1 mln, while it was plus $33.4 mln in the analogous period of the last year.

The decrease is obvious. That is why one should expect that in general according to the results of the year 2009 at least not less sum of money would be needed as last year, when foreign trade deficit reached $4.4 billion. Meanwhile, the sum is growing with every quarter.

As Uladzimir Usosky, Doctor of Science, Economics, stated earlier, the great increase of foreign borrowings caused significant growth of the gross external debt. The external debt of the government by 1.01.2007 was $589 mln, by 1.10.2008 $2.144 billion. The total external debt of Belarus as of 1.11.2008 reached 14.557 billion. It should be compared with $5.128 billion on 1.01.2006, $6.786 billion on 1.01.2007, and $12.494 billion on 1.01.2008. Such a speedy growth of debts has caused the economy’s “warming up” greatly.

As compared to the expected deficit figure, the received $0.5 billion and expected 0.5 billion of the Russian loan seem an insignificant drop. All the reserves available today could be spent for paying for the annual import.

The yuans received from the bank of China under the swap agreement concluded on March 11 wont save the situation. China and Belarus’ currency swap is worth 20 billion yuan ($2.8 billion), and the Chinese side is to receive about (8 trillion Belarus ruble).

Thus, if the negative tendencies in the external trade of Belarus won’t be overcome, in 2009 the country could lose almost all its reserves, and only yuan would be left.

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