Financial Analyst: Default Is Looming on the Horizon

The economic situation continues to heat up.

According to the latest data from the National Bank, in the first half of 2020, Belarus's external debt increased to $ 41.1 billion - and, thus, updated a historical record.

The situation is aggravated because the statistics do not yet include August and September when the country's financial situation continued to deteriorate.

"This is a fairly stable tendency towards the growth of external debt," Vadzim Iasub, senior analyst at Alpari, said in an express commentary to Salidarnasts. - I think if Russia's promises to lend money to Belarus are realized in the near future, this debt will grow even more - and will once again renew the historical record.

According to the financial expert, the main problem of this trend is not even the amount of debt, but the ability of the state to service this debt.

- In the current political situation, Belarus is deprived of any opportunities to attract money, except from the Russian side. There may also be Chinese loans, but they are questionable. We will not have other foreign sources.

It is unlikely that Russia and China will agree to meet all the financial needs of Belarus. In the coming years, we need to pay about $ 4 billion annually. And most of this amount needs to be refinanced - that is, about 3 billion must be raised every year to pay off old debts.

Without such external financing, there can be problems with debt servicing. And this means that a default may be looming on the horizon for several years, - Vadzim Iasub believes.

According to the interlocutor of "Salidarnasts", the Belarusian authorities may face financial problems already in 2020, since the promised Russian loan does not cover the entire amount that Belarus needs to refinance in order to pay off its debts.