Belarus’ GDP may decrease by 1-1.5 p.p. in 2021-2022 due to EU, U.S. sanctions – EDB

MINSK, Jul 8 - PrimePress. Belarus’ gross domestic product (GDP) may decrease by 1-1.5 percentage points per year in 2021-2022 due to the sanctions imposed by the European Union (EU) and the United States, Alexey Kuznetsov, head of Economic Analysis at the EDB, said on July 7 during the online presentation of the latest EDB macroeconomic report.<br> <br> He said the uncertainty of quantitative estimates of the imposed sanctions is high. They will most likely primarily affect the export potential and investment climate.<br> <br> “The imposed restrictions factor in our baseline forecast. We assume that petrochemical exports, foreign direct investments, and revenues from exports of air transport services will decrease. Considering this, according to our estimates, Belarus’ economy will lose an average of 1.-1.5 p. p. of GDP growth per year in 2021-2022,” said Kuzentsov. <br> <br> He said that it is still possible that the country’s GDP may grow by 2-2.5% in 2021 in case of positive developments. <br> <br> “However, we cannot not rule out the possibility that the situation will go worse than the baseline scenario assumes, and then GDP growth may significantly decline this year,” Kuzentsov said.<br> <br> As previously reported, the government of Belarus approved a medium-term financial program of the national budget for 2021-2023 under Resolution #227 of April 20, 2012, according to which the Belarusian GDP growth is planned at the level of 1.8% in 2021, 2.9% in 2022 and 3.8% in 2023.<br> <br> Currently, the EDB forecasts 1.3% growth of Belarus’ GDP in 2021 (a 0.1% decrease was expected in the previous forecast). The baseline scenario assumes that the current rate of GDP will be maintained in 2022. <br> <br> As previously reported, on June 25, 2021, the EU Council introduced sanctions against largest sectors of Belarus’ economy. The sanctions prohibit direct or indirect sale, supply, transfer or export to any natural or legal person, entity or body in Belarus or for use in Belarus of goods used for the production or manufacturing of tobacco products; the purchase, import or transfer from Belarus of petroleum products, potassium chloride products. The EU Council prohibited EU entities and individuals from purchasing, selling, and provide investment services for or assistance in the issuance of, or otherwise deal with transferable securities and money-market instruments with a maturity exceeding 90 days, issued after 29 June 2021. Securities of large credit institutions or other institutions with more than 50% state ownership or control as of 29 June 2021 are also prohibited. The ban also affects bonds issued by major credit or other institutions established in Belarus with over 50 % public ownership or control as of 29 June 2021 (Belarusbank, Belinvestbank, Belagroprombank). The government of Belarus, public bodies, corporations or agencies, or entities acting at their direction, are prohibited from acquiring insurance or reinsurance services from the EU. Any payments or disbursements by the European Investment Bank in connection with any existing agreements with the Republic of Belarus or its public authorities shall be prohibited. The EU member states will take the necessary measures to limit the involvement of multilateral development banks in Belarus. The prohibitions shall be without prejudice to the execution of contracts concluded before 25 June 2021 or ancillary contracts necessary for the execution of such contracts.<br> <br> The Council of the European Union (EU) at the level of foreign ministers of EU member states approved on 21 June 2021 the fourth package of individual sanctions on Belarus targeting 78 individuals and eight entities. The list of persons and entities hit by the sanctions includes MAZ, BelAZ, New Oil Company, Belaeronavigatsia air traffic service company, Bremino Group, Logex and Globalcustommanagement logistics companies, Sohra (exporter of Belarusian equipment).<br> <br> The United States on 21 June 2021 introduced sanctions against Belarus’ 16 individuals and 5 entities in response to human rights abuse and the Ryanair diversion incident. The United Kingdom (UK) on June 21 imposed sanctions against 11 individuals and two entities of Belarus after the Ryanair plane incident, as well as in response to human rights violations and suppression of democracy. Canada on 21 June 2021 imposed sanctions against 17 individuals and five entities of Belarus after the Ryanair plane incident and in response to human rights abuse. End<br> <br>

2021-07-08

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