Updated at 13:48,15-08-2017

Prime Minister: Belarus is in very difficult economic situation

Vyachaslaw BUDKEVICH, Naviny.by

The country is in a very difficult economic situation, Prime Minister Mikhail Myasnikovich said in an interview televised on channel RTR Belarus on Saturday evening, BelaPAN said.

"In order to be competitive, we should be actively involved in investment activity and modernization, no passively or moderately," Mr. Myasnikovich said. "It is impossible to do so without accessible loans. What sources can be used? Profitability is not high. Government financing is limited. Foreign direct investment is small. There are almost no proceeds from privatization."

Lending is the only remaining source, but loans are no accessible for the real sector of the economy. Mr. Myasnikovich noted. "To have a competitive economy, it is necessary to inject money, but no one will take up loans at 40-percent interest," he said.

Mr. Myasnikovich admitted that the government had ordered economic entities to borrow for modernization in 2013.

Banks should lower there interest rates to at least the level of inflation, he suggested, adding that the government would no longer make banks finance inefficient projects.

Mr. Myasnikovich also said that he was going to sign a so-called financing plan the following week. The plan will specify the distribution of public funds for financing housing construction, rural development and other government programs. "This will be an exhaustive list," he noted.

According to Mr. Myasnikovich, banks are able to increase lending by about 55 trillion rubels ($5.7 billion). "This amount, coupled with repaid loans, is the money that the government should manage reasonably," he said.