The growth in capital investment in Belarus in 2012 will make 96% as against 2011, Economy Minister of Belarus Nikolai Snopkov said at a session of the Council of Ministers on 27 December, BelTA has learnt.

The growth in capital investment will slow down for two major reasons. The first one is zero budget deficit as part of measures to fight back against inflation. At the same time the increase in spending will be limited by the amount of real incomes,” Nikolai Snopkov said.

In 2012 Belarus is going to ease tax burden on the economy. “This will cost about Br2 trillion,” the minister added. The government capital investment will reduce from 3.7% of GDP like it was in the previous years to 3.1% of GDP in 2012. Some 52% of budget funds will be spent on salaries, servicing and repaying of the public debt and subsidizing of interest rates. Another important factor is restriction of emission. The spending on public debt servicing and related expenses have been increased from 1.2% to 2% of GDP.

The Economy Ministry named the major sources of capital investment. In the past three years those were loans that accounted for over 25% of total investments. In general, Br1 of profits came with Br1.7 of credit debts. In early 2011 the amount of loans was two times as big as the amount of deposits raised by banks from individuals and companies. “It means that half of loans came from emission. Therefore, this year Br12 trillion of loans will be channeled to finance government programs, Br7 trillion of them are emission loans,” Nikolai Snopkov said. These factors will help reach a balance between demand and supply in the national economy.

Net export will become the source of growth and formation of GDP in 2012 and years to come. Taking this into consideration, the structure of investments will change. The share of own funds of organizations and companies and foreign resources will increase, while the share of bank loans will shrink to make about 16% (vs. almost 27% last year).

BelTA