Measures to ensure a balanced budget were discussed at a May 17 meeting with the Belarusian head of state. The main task is to reduce budget costs by reducing state support for enterprises.
A related decree was signed in Belarus in February 2016, according to which state-run enterprises were to get recuced compensation for interest payment from the state budget. On May 17, further steps along these lines were talked over. Some specific mechanisms of action were raised.
A draft resolution of the Council of Ministers optimizes costs and reduces by 2% interest rate compensation for borrowers on subsidized loans.
Alexander Lukashenko, President of Belarus:
We decided to help individual enterprises on the most important projects in terms of compensation of part of interest payments. If, say, a bank lends at 20% or 30%, some interest expenses were compensated from the state budget. Am I right? Today we are talking about reducing the compensation from the budget. The question is: who will assume this burden? Banks or enterprises? We have already taken a number of decisions, but nevertheless I would like to hear from you the answers to several questions: for example how much will we save? How much will the budget save? And who will bear this burden? Either enterprises or banks. I would like a compromise here provided it's a normal compromise. And I would like to hear an assessment from the State Control Committee, since you are responsible for budgetary control. What do you think?
Vladimir Amarin, Minister of Finance of the Republic of Belarus:
The reduction of state support by two percentage points was approved in principle, but the burden is to be shifted not only on borrowers but also on the banking sector in equal shares. The amount of savings after the reduction of state support for 2016 is at BYR 400 billion. This decision to reduce state support will be valid for the entire period until full repayment. Next year, the budget is to save about BYR 500 billion.