Banks Are Near Miss

In the near future the Belarusians may withdraw their deposits in panic.

Over the Knee

If the human scale is taken as an example, then the Belarusian economy has plunged into the quagmire of non-payments over the knee. Since the beginning of the year overdue accounts receivable, i.e. money that enterprises failed to receive in time for goods sold have increased by 20% and now make a quarter, Belsat informs.

It Was Worse Only 20 Years Ago

Business loan arrears of enterprises have doubled since the beginning of this year. Unpaid debts now equal to more than 14% of all bank assets. The indicator of 15% was recorded 20 years ago - on the eve of the crisis 1997 year.

"If to take indicators of the banking system, they still fall within norms of the National Bank, in particular, at the expense of explicit and latent form of support. But some banks are already near miss," Leanid Fridkin from Economic Newspaper notes.

The Collapse of the Banking System Is in Hands of the Population

The inspection of the domestic banking system held by the IMF this year shows that four banks face lack of money to service their debts, and two of them require assistance on the part of the state. Experts believe that on a mid-term horizon the state is able to provide such support, if only the population does not start withdrawing their deposits in panic. But in the near future Belarusian will suffer consequences of such assistance.

A New Wave of Layoffs Is Expected

"Earlier state-owned enterprises had too many employees, they will have to take cuts; additional reason for cuts is debts which do not allow to support such personnel," Leanid Fridkin explained.

Lukashenka: Do not change anything!

Experts note that in future the burden of support of inefficient production will increase exponentially. However, on Monday Aliaksandr Lukashenka said that there would be no changes in the current policy and, in particular, he had prohibited to bankrupt loss-making enterprises and collective farms.

"It's a very strange statement given that since last year a special Government Commission - the so-called Club of Creditors - has studied in detail the situation at insolvent enterprises and separately identified those which could be revived," Vadzim Iasub is surprised.

Experts sum up since reforms are not taken, the further ability of the authorities to preserve enterprises and banks from bankruptcy will depend on new foreign loans. Next year the government plans to borrow $3 billion from the IMF and about $1 billion from foreign stock markets. This sum is impossible to borrow from either mentioned sources or others; the country may face default next year.