MINSK, February 21 (RIA Novosti) – Belarus’ total foreign debt may exceed the safety threshold of 55 percent of GDP in 2013, if the government continues its policy of massive state support to its enterprises, Economics Minister Nikolai Snopkov said in a report released on Thursday.
“Calculations show that in the conditions of the ‘classic’ use of state support, enterprises focus their activity on utilizing sums allocated rather than on their development. Already today an additional $3.5 billion worth of investment has been announced for modernization,” says the report.
If there is no foreign direct investment or internal private investment, this financing requirement can only be met by external borrowing, the report said.
“As a result, state foreign debt may exceed $17 billion,” raising the foreign state debt to GDP ratio to 22.7 percent, close to the safety threshold of 25 percent. The gross foreign debt will also rise as a result.
“In this situation, even under the favorable dynamics of economic development in the economies of Belarus’ trading partners, gross foreign debt may reach $41.6 billion or 55.3 percent of GDP, above the threshold of 55 percent,” the report said.
Debt levels of above 60 percent are considered unsafe by organizations such as the World Bank, IntellAsia says.
Gross foreign debt includes the external liabilities of the state and corporate sectors.
