Fiscal policy in Belarus supported economic activity in 2023 with a budget execution surplus.
In 2023, the consolidated budget was executed with a surplus of 1.1% of GDP. Budget revenues grew by 4.6 percentage points of GDP due to high growth in domestic demand and foreign trade volumes, and growing transfers from Russia. Budget expenditures grew by 1.9 percentage points mostly because of increased spending on wages and debt servicing. Spending increased faster than trend rates, and fiscal policy supported economic activity. In 2024, fiscal policy will remain expansionary, and the consolidated budget will be close to equilibrium or have a small surplus.
Public debt decreased by 1.1 percentage points in 2023: to 32.2% of GDP at the beginning of 2024.
The size of public debt and the volume of debt repayments (less than 5% of GDP per year) are not large, but even such a scope of repayments requires refinancing a larger share of them to avoid major budget adjustments. Maintaining public debt at 30% of GDP in the medium term will require a primary budget surplus of about 0.3% of GDP per year, and if economic conditions worsen, this will require more than 2% of GDP. Space for fiscal stimulus is limited, and fiscal sustainability depends on Russian support.