MINSK, Sept 7 (Reuters) - Belarus plans to finance a $2 billion budget deficit for 2011 equalling 3 percent of gross domestic product (GDP) by using a loan from China and a Eurobond issue, Finance Minister Andrei Kharkovets said on Tuesday.
The lower chamber of Belarusian parliament approved a budget plan to tackle the deficit which is set to be twice earlier forecasts [ID:nLDE6731GK] as the export-oriented economy has been recovering slower than the government initially hoped.
In total, Belarus plans to borrow $2.2 billion in 2011, with $1 billion through a debt issuance, coming as part of its earlier announced external borrowing plan for 2010-2011, Kharkovets said.
In addition, China has already promised the former Soviet Republic a $1 billion credit line. A World Bank loan programme will cover most of the country's remaining needs.
"We have balanced the budget in such a way that we will have enough of loans (to cover deficit)," Kharkovets told reporters.
In the summer, Belarus raised $1 billion in its maiden five-year Eurobond [ID:nLDE6790PO], with the government planning to use the funds for this year's budget deficit, seen at 1.5 percent of GDP.
Kharkovets said that the external debt of Belarus rose to $9.5 billion, or one-fifth of last year's GDP, as of Sept. 1, from $7.9 billion at the year beginning and four times the amount at the start of 2008.
Much of Belarus' economic problems over the last two years stemmed from Russia, which accounted for 47 percent of the country's total exports last year. Russia has been hard hit by its first recession in a decade, cutting demand for Belarus' goods.
In addition, Moscow put up prices earlier this year for energy it delivers to Belarus, costing the country an estimated $2 billion.
(Reporting by Andrei Makhovsky; Writing in Moscow by Lidia Kelly; Editing by Dmitry Sergeyev)