Belarus's External Debt Breaks Record In the entire history of statistics

Moreover, the situation is only getting worse.

The National Bank will publish detailed data on the country's external debt once a quarter and with a more than 2-month delay. As of July 1, the volume of external debt reached a new record value - 41.116 billion USD, the website banki24.by writes.

The main reason for the growth of external debt was the situation in the public administration sector. In this sector of the economy, the external debt jumped to USD 18.054 billion.

The increase in the debt of the public administration sector is explained by the issue of Eurobonds in June in the amount of USD 1.25 billion. True, all this money has already been spent. In July and August, the National Bank of the Republic of Belarus spent a comparable amount on foreign exchange interventions.

Also, the authorities keep records of overdue foreign debt. According to the regulator, as of July 1, the Belarusian economy did not give over USD 713.3 million to external creditors. The main part of this amount falls on the enterprises of the real sector.

By the way, the real sector is the second largest debtor in the country's economy. By July 1, the liabilities reached 14.830 billion USD.

For comparison: banks and other credit and financial organizations owed USD 5.125 billion to external creditors on the same date. In a similar order, the public administration sector, banks and enterprises lined up in terms of the volume of external debt repayment in 2021–2022.

An important detail: in addition to the fact that the state is directly the leader in terms of debt, it also guarantees the return of billions of dollars. As of July 1, 2020, the size of the external debt of the public sector in the expanded definition and the debt guaranteed by the authorities reached 26.590 billion USD.

In addition to the debts of the Ministry of Finance and the National Bank, the extended definition includes bank debts (up to USD 3.214 billion) and corporate liabilities (up to USD 4.418 billion). Delay on external debt of the public sector in the extended definition amounted to USD 242.4 million.

Due to the significant debt load, economic sectors divert billions of resources to pay off and service obligations. For example, in 2019, spending amounted to USD 6.372 billion, and in the first half of 2020 - USD 3.201 billion. According to our calculations, in the current and next year the load will remain at about USD 6 billion.

By July 1, the average per capita external debt amounted to USD 4,375 per person, although at the beginning of 2010 this figure was almost twice as low (USD 2,322), and at the beginning of 2006 it was 8 times lower (USD 526).

From 2005 to 2020, the size of external debt in relation to GDP increased from 17% to 65.4%. This means that for a decade and a half, the Belarusian economy has been growing almost 4 times slower than the increase in its external debts. In fact, the current model of the economy existed due to constant cash injections from outside.

On September 14, Putin and Lukashenka agreed that Belarus will receive new loans in the amount of USD 1.5 billion in the equivalent (2 state loans and an EFSD loan). This will further inflate the country's external debt.

It is already known that the Russian money will quickly dissolve. The Russian state loans will be used to refinance old debts and ensure payments for imports, and the EFSD loan (USD 500 million) will be used to pay off the debt to Gazprom's subsidiary.