Hanging By Single Thread

One awkward move will collapse the Lukashenka’s economy model.

The official statistics recorded a bounce in the real sector debt on loans and borrowings. For one month, the debt grew by 2.1 billion BYN.

At such an amount, as in June 2017, the debts of enterprises did not grow ever since January 2016.

The banki24.by found out the reasons for the increase in debt.

June was the first month of 2017, in which the Belarusian ruble weakened against the dollar. If on June 1 the rate of the National Bank amounted to 1,8642 BYN for 1 USD, then on July 1 - 1.9396 BYN for 1 USD.

In other words, in just a month the BYN-ruble has fallen in price against the dollar by 3.7%. The euro rose even more steeply: on June 1 it was equal to 2,0767 BYN for 1 EUR, for July 1 - 2,2088 BYN for 1 EUR. As a result, the Belarusian ruble weakened by 6.4%.

Over half of bank loans are denominated in foreign currencies. According to the National Bank, as of July 1, the share of ruble loans in the total amount of debt was 45.3%.

Therefore, it is quite logical that along with the rate bounces, the accumulated debt also increased. Between June 1 and July 1, the arrears on loans and borrowings increased by 3.5%.

Due to the huge absolute value of debt, the debt growth in money terms amounted to BYN 2 099 million.

The growth of debt for June occurred in all regions: from + 0.7% in the Brest region to + 7.8% in the Vitsebsk region.

Minsk (+465 million BYN), Minsk region (+460 million BYN) and Vitsebsk region (+374 million BYN) entered the top three in terms of debt growth in money. Industry gave about 67.7% of the increase in debt on loans and loans in June.

The debt of industrial enterprises increased by BYN 1 421 million. Inside the industry, almost all of the increase in debt fell on processing.

In June-2017, the manufacturing industry increased its debt by BYN 1 298 million. Woodworking and pulp and paper industry (+368 million BYN), refining (+185 million BYN), chemical industry (+163 million BYN), machine building (+134 million BYN) occupied the first place in debt growth.

In relative terms, the debt of these industries increased by 6.8%, 11.7%, 5.2% and 3.6%, respectively. Outside the industry, a significant increase in the debt on loans and borrowings was observed in agriculture (142 million BYN, + 2.8%), in construction (293 million BYN, + 4.6%), in information and communications (125 million BYN, + 9%).

It is likely that it was the exchange rate revaluation of debt on loans and borrowings that ate the economy's profit in June.

According to the Belarusian Statistics Committee, for this month the whole real sector earned a microscopic profit - 15.9 million BYN. By the way, this once again shows how prudent the National Bank should be in the exchange rate policy.

One awkward move - and almost all the accounting profit of the accredited enterprises takes the knock.