Presentation by Kateryna Bornukova, Academic Director at BEROC
1. When Russia Sneezes..
The Impact of the Russian Crisis on the
Belarusian Economy
Kateryna Bornukova, Igor Livshits
2. Background
§ Russia main export market
– Around 40% of exports
– 67% of exports other than petroleum oils/potash
§ Crisis in Russia in 2015
– Dec 2014 devaluation
– GDP growth -3.7%
§ One door closes, another one opens
– Countersanctions (Aug 2014)
– Sanctions against Ukraine, Turkey …
3. The Crisis in Belarus
§ Exports to Russia in 2015 shrunk
– From $15 bln to $10 bln
§ Belarusian GDP in 2015 shrunk
– From $76.1 to $54.6 bln
– -3.9% in constant prices
§ Crisis was not only about Russia
– Structural problems
– Oil prices
– Exports to the rest of the world down from $21to $16.5 bln
4. Key Findings
§ Impact in 2015
– Forgone trade: $4.8 bln (+0.3 bln and -5.1 bln)
– Forgone value added: -1.6% (lower bound)
§ Lasting effect:
– 2016 still $4.4 bln below 2014 in trade
– GDP continues its decline (now 6.3% below 2014)
§ The other side of the coin
– Some industries benefited from (counter)sanctions
– Food industry up and continues growing
5. Two perspectives
§ Macro
– Trade data
– GDP/Output data
§ Goods level data
– Illustrative examples
– Trade Comedy
– Trade is concentrated: top 45 goods typically capture around 60%
6. Monthly Exports from Belarus to
Russia
Monthly exports from Belarus to Russia, 2012-2016. Billions of USD. Comtrade/Belstat data
0.4
0.6
0.8
1
1.2
1.4
1.6
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Jan-14
Mar-14
May-14
Jul-14
Sep-14
Nov-14
Jan-15
Mar-15
May-15
Jul-15
Sep-15
Nov-15
Jan-16
Mar-16
May-16
Jul-16
Sep-16
Nov-16
BlnUSD
7. Monthly Exports from Belarus to
Russia
Monthly exports from Belarus to Russia, 2012-2016. Billions of USD. Comtrade/Belstat data
1.33
0.87
0.4
0.6
0.8
1
1.2
1.4
1.6
Jan-12
Mar-12
May-12
Jul-12
Sep-12
Nov-12
Jan-13
Mar-13
May-13
Jul-13
Sep-13
Nov-13
Jan-14
Mar-14
May-14
Jul-14
Sep-14
Nov-14
Jan-15
Mar-15
May-15
Jul-15
Sep-15
Nov-15
Jan-16
Mar-16
May-16
Jul-16
Sep-16
Nov-16
BlnUSD
8. Macro Perspective
§ Identify effect of the Russian crisis on exports (category by
category)
– Naive calculation
– Adjusting for trends: by how much the rest of trade changed?
§ Link exports to output by sector
§ Estimate effects on GDP through effects on output
9. Macro Perspective: Results
§ Effect on GDP:
– Naive: - 3.1%
– Adjusted: - 1.6%
• Trade with the rest of the world also fell
• The source of trouble is not only Russia
§ Winners/Losers:
Food processing 2.45%
Rubber and plastics -7.48%
Machinery -13.22%
Electrical eq-ment -8.38%
Transport eq-ment -23.54%
16. What’s next?
§ Russian economy is improving
– No signs of return to strong growth
– Trade is slowly recovering
– Growth in Belarusian exports/manufacturing
– However, Belarusian GDP continues to decline
§ Not many signs of diversification
– Trade with the rest of the world declines in 2015 and 2016
– Share of exports to Russia increased from 38% in 2015 to 46% in
2016
17. Conclusions
§ Belarus lost 1.6% of GDP due to decline in trade with
Russia
– Trade channel explains at least 40% of GDP decline in 2015
§ Winners are few despite huge devaluation
– Food industry – winner due to countersanctions
§ No crisis benefits in sight
– Negligible number of goods capable to diversify
– Trade with the rest of the world continues to decline