Belarus to address bad debts with extension of settlement terms

According to the National Statistics Committee, in May 2016 there was a simultaneous reductionin overdue receivables and payables in the country. This decrease was due to the transfer of BMZ arrears for fuel and energy resources in the current debt and fixation of the debt at a rate of January 1^st, 2016. Debt payments will be carried out uniformly throughout 2017 without recalculation of the debt if the national currency exchange rate changes. In the power industry, this solution is likely to lead to a decrease in profits and downsize financial results. Industries, which would be allowed to benefit from fixed overdue debt for energy, are likely to report an increase in profits, financial health of enterprises with bad debts is likely to improve and the government would be able to report an improvement with settlements. If such a practice is used in other economic sectors, the real financial picture will be significantly distorted.