2023 budget: social focus

What was discussed during the zero reading of the bill ‘On the National Budget for 2023’

The amount of family capital next year will increase by Br4,341 (about $1,785) and will amount to Br30,336 (about $12,471). All social obligations of the state will be fulfilled in full, and even the refusal of the World Bank to finance a number of projects in Belarusian education will not affect the work and development of this field. This and many other issues were discussed in the Oval Hall of the House of Government during the meeting of deputies and senators with the Prime Minister and members of the government — the so-called zero reading of the bill ‘On the National Budget for 2023’.

Photo by BELTA

On the course of recovery growth Prime Minister Roman Golovchenko, 

“Since July of this year, the monthly dynamics of GDP has been improving. In January-October this figure improved by 0.5 percent as against January-July and amounted to 95.3 percent. The economy is on a trajectory of recovery growth. Foreign trade is balanced. Effective measures to redirect and support exports pave the way for a record foreign trade balance of $4 billion for three quarters. It increased by $1.2 billion year-on-year.”
The government, together with the National Bank, has carried out work to stabilise the situation in the domestic foreign exchange market. The situation in the foreign exchange and financial markets is completely stable. There is no rush demand for foreign currency. Since the beginning of the year, the population has sold $145 million on a net basis. Fixed-term retail deposits in Belarusian rubles are on the rise. Their increase amounted to more than Br1.1 billion (over $452 million), or 22 percent. Since the beginning of the year, the Belarusian ruble has strengthened against the euro by 13.3 percent, against the U.S. dollar — by 5 percent. The Belarusian ruble is an attractive currency for savings. The currency obligations of the state have been fulfilled in full. On November 1st, the volume of gold and foreign exchange reserves was $7.6 billion while the target was at least $7 billion.

There is deflation in the country — this happened for the first time since 1991

According to Roman Golovchenko, thanks to the decisions taken, the inflation has been slowing down for the third month in a row in annual terms. Moreover, “Deflation at the level of 1 percent was registered in October, for the first time since 1991. Belarus preserves a stable and manageable situation on its labour market. In January-October 2022, the number of people employed in the country’s economy remained almost at last year’s level. The total unemployment rate is less than 4 percent.”
The Prime Minister informed the parliamentarians, “The production of trucks increased by 86 percent, rock haulers — by 22 percent, tractors — by 7 percent, buses — by 5 percent, elevators — by 43 percent, electric engines and generators — by 8.3 percent, chemical fibres — by 11 percent and cellulose — by 22 percent.”
Roman Golovchenko emphasised that the financial results of enterprises are improving. In January-September, revenue surged by 10.6 percent year-on-year, overpacing the increase in production costs, “Profit from sales increased by 22.8 percent, net profit — by 12.2 percent. Net profit amounted to Br14 billion (about $6 billion). Return on sales — 8.9 percent. These are the best indicators over the past seven years. In addition, the debt burden of enterprises has been reduced. The ratio of total debt to revenue today is 48.1 percent. The share of unprofitable organisations decreased to a minimum of 13.2 percent.”

On November 28th, Head of State Aleksandr Lukashenko signed Decree No. 411, which approved the most important parameters of the forecast for the socio-economic development of Belarus for 2023.
• In particular, the growth rate of the gross domestic product is expected to reach 103.8 percent as against 2022. The growth rate of the real disposable income of the population is expected at 104.1 percent, fixed-capital investments — 122.3 percent, export of merchandise and services — 105.5 percent.  
• In order to hit the social and economic development targets, the government will adopt a plan for 2023. It will concentrate all the measures and resources needed for the uninterrupted and effective operation of organisations amid sanctions. The measures will also be aimed at raising living standards of the population. 
Increased investment in fixed assets will be the main source of economic growth next year. Investment is planned in three main areas:
• As much as Br7.7 billion (about $3.2 billion) will be invested in building housing and the appropriate infrastructure. There are plans to build 4.3 million square metres of housing, including 1.3 million square metres of housing with state support.
• As much as Br7.9 billion (about $3.3 billion) will be invested in the creation and development of infrastructure in the regions. (There are plans to build 17 preschool institutions for kids, 9 secondary education institutions, 22 physical education and recreation complexes, 7 swimming pools, 21 sport facilities, 46 healthcare institutions, 22 bridges and overpasses on major motorways and 30 bridges and overpasses on municipal roads).
• As much as Br31.2 billion (about $12.8 billion) will be used to invest in projects and retooling. (There are plans to realise 129 investment projects, 14 integration projects, and 51 import-substitution manufacturing projects).

EXPORT
- $47.7 billion with a growth rate of 105.5 percent — these are the parameters of the planned export in 2023. 
- The government intends to compensate for the loss of export to Western countries and Ukraine by stepping up presence on the markets of Russia, China, the Middle East, Central Asia, and Africa. There are plans to increase shipments to Russia by 6.5 percent, to China by 15 percent, to Africa by 10 percent. 
- As a result, foreign trade surplus is expected to reach $1.6 billion. It will ensure the balanced state of the balance of payments and will have a positive effect on maintaining the country’s economic security at a proper level.

BUDGET REVENUE Taking into account all the measures that are taken into account in the Tax Code, the volume of consolidated budget revenues for 2023 is provided in the amount of Br57.2 billion (about $23.5 billion) or 121.5 percent of the current year’s estimate. National budget — Br33.4 billion (about $13.7 billion) or 124.6 percent compared to the current year.

BUDGET EXPENDITURES
More than a third of all expenses — 38.6 percent — will be the cost of wages, with accruals and pensions of military personnel. For these purposes, in 2023, it is planned to allocate a total of Br23.5 billion (about $9.7 billion) (an increase by Br3.8 billion compared to the current year) (about $1.6 billion).
In relation to GDP, the most budget-intensive expenditures of the consolidated budget are for healthcare (4.4 percent or Br10.4 billion) and education (4.3 percent or Br10.3 billion (about $4.3 billion)). The budget guarantees the availability of basic social services in the field of health and education for the population.
 
 WAGES 
In general, the nominal accrued average monthly wage in the economy will amount Br1938 (about $800), in the public sector — Br1454 (about $600). 

HEALTHCARE
In addition to a significant increase in the cost of salaries for employees in the healthcare and education sectors, it is additionally envisaged:
-  in health care — to increase the national budget expenditures by more than 20 percent for the purchase of medicines and centralised purchases of medical equipment. The amount of funding for these expenses next year will be Br1.3 billion (about $535 million). These expenses include Br240 million (almost $100 million) for the purchase of at least 4 million doses of domestically produced Sputnik-V vaccine. 

EDUCATION
In education, additional funds are provided for equipping and modernising educational laboratories of higher education institutions, the financing of which was planned to be carried out at the expense of World Bank loans. As well as the equipment of resource centres of institutions of secondary specialised education. It is also planned to centrally purchase school buses at the expense of the national budget for a total of Br24.8 million (about $10.2 million) with their transfer to the regions. In order to instil a patriotic position among young people, Br1.7 million (about $600,000) will be allocated next year to finance patriotic clubs. 

PENSIONS AND BENEFITS
The national budget provides for a subvention in the amount of Br1.9 billion (about $781 million) for:
- the payment of the so-called insurance costs of the fund — these are pensions and benefits — Br1.3 billion (about $535 million).
- the payment of benefits for the care of certain categories of citizens, employment of the population, as well as children’s sanatorium and resort treatment — Br566 million (about $233 million) 
- the financing of specialised educational and sports institutions of trade unions — Br53 million (about $21.8 million).

SUPPORT FOR FAMILIES WITH CHILDREN
Br429 million (about $176 million) are provided for these purposes. According to estimates, more than 13,800 families will benefit from the payments, while the amount of family capital increases by Br4,341 (about $1,785) and will amount to Br30,336 (about $12,471).

By Maksim Osipov, Vladislav Sychevich