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Thursday, 28 November 2019 09:52

Belarus' budget bill 2020 passes second reading

Belarus' budget bill 2020 passes second reading

The 2020 budget bill passed the second reading on 27 November, BelTA has learned.

The budget policy in 2020 will be aimed at ensuring balance in national and local budgets and strengthening the social orientation of expenses. The tasks also include securing the ratio of public sector wages to wages in the economy as a whole at the level of no less than 80%, and the optimization of the public debt structure. Budget funds will be concentrated on the areas that will help achieve the strategic goals of social and economic development of the country within the next five years.

A reminder, the 2020 budget is based on the baseline scenario of economic development. The budget expects GDP growth at 1.9%, the annual inflation at 5%, the refinancing rate at 9.5%, oil of the Urals variety at $60 per barrel, processing of Russian oil at 18 million tonnes.

Budget revenues are expected to reach Br24.4 billion, up 0.3% in the nominal value over 2019. Revenue expectations take into account the tax maneuver in Russia. Budget losses are estimated at Br1.9 billion in 2020.

Budget spending amounts to Br25.4 billion or 11.4% as against expected budget execution in 2019.

Thus the budget deficit stands at Br995.1 million.

A reminder, an extra Br1.8 billion is to be spent on salaries in 2020. If the baseline scenario remains in place, an injection of about Br15 billion will help grow public sector salaries up to 80% of the country's average and to help meet the targets related to salary rises for education and healthcare workers.

Spending on salaries will make up over a third of the consolidated budget (taking into consideration social insurance contributions).

Additional funds will be needed to maintain pension benefits at the level of at least 40% of the average salary.

About Br2 billion is to be transferred to the social security fund in the form of subventions in 2020.

The budget bill also provides for funds to extend the family capital program for the mid-term period (about Br350 million), funds for one-off payments to veterans of the Great Patriotic War and other people affected by the war, and the funds to mark the 75th anniversary of the Great Victory (Br18 million; financial support will be provided to about 22,000 beneficiaries). Social security spending will rise by at least 11%.

Housing construction programs will undergo some changes. The amount of targeted subventions for the construction of engineering and transport infrastructure will be increased 3.5 times. Construction of energy infrastructure will be financed using a 50/50 principle (50% of the funds will be earmarked by the central budget, and 50% will be own funds of the Energy Ministry organizations). Subsidies to pay the loans issued in line with Decree No.240 are expected to nearly double to make up Br222 million.

As far as inter-budget relations are concerned, the budgetary policy seeks to level the playing field in the regions. Substantial financial assistance will be provided to the regions. The amount of funds transferred from the central budget to local budgets will rise by nearly a third (up to Br5.3 billion).

Capital spending will be limited. The amount of funds transferred from the budget to finance the government investment program is to remain unchanged. External government borrowing will be used more actively.

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