Details: Belarus’ foreign trade efficiency declines in 2020, Russia’s role as export market grows

<p> MINSK, Mar 9 - PrimePress. Belarus’ foreign trade turnover in goods and services according to the balance of payments methodology in 2020 was $72.242 billion, a year-on-year decrease of 14.4%, the National Bank of Belarus said in a statistical report. </p> <p>   </p> <p> Exports were $37.082 billion (minus 11.7%) and imports were $35.160 billion (minus 17%). The balance was positive at $1.922 billion compared to a negative balance of $403 million in 2019. </p> <p>   </p> <p> According to the National Bank of Belarus (NBB), proceeds from exports of goods fell by 11.4% to $27.717 billion last year, while proceeds from exports of services fell by 6.7% to $8.859 billion. Spending on imports of goods decreased by 12% to $29.625 billion, payments for imports of services increased by 7.2% to $4.954 billion. </p> <p>   </p> <p> Foreign trade surplus due to crude procurement woes </p> <p>   </p> <p> Belarus managed to achieve a trade surplus in goods and services in 2020. This happened because imports declined more than exports due to a lack of oil supplies from Russia at the beginning of the year. </p> <p>   </p> <p> Nevertheless the situation is not sustainable, due to a fall in foreign exchange revenues. Trade was negatively affected by lower oil supplies to Belarusian refineries and the absence of potash contracts at the beginning of the year. The coronavirus pandemic also led to a marked decrease in external demand. </p> <p>   </p> <p> Purchasing power index of Belarusian exports declines in 2020 </p> <p> </p> <p> The share of foreign trade in goods traditionally prevails in Belarus’ foreign trade. According to Belstat, in 2020 it was 76.2%, while the share of services was 23.8%. The share of services increased by 0.8 p.p. year on year in 2020. </p> <p>   </p> <p> The decrease in the value of exports and imports of goods in 2020 was due to a drop in both prices and physical volumes of supplies. Compared to 2019, average prices of exports decreased by 11.5% and imports by 8.7%, according to Belstat. At the same time, exports decreased by 0.4% and imports by 9.5%. </p> <p>   </p> <p> For example, in value terms, exports of potash fertilizers fell by 10.26% year on year in 2020 to $2.721 billion. This was due to lower export prices as in physical terms exports increased by 14.68% year on year to 7.143 million tonnes in terms of 100% potash. </p> <p>   </p> <p> The fall in export prices for petroleum products was even more dramatic. The physical volume of petroleum product exports fell by 19.31% year on year in 2020 to 8.479 million tonnes, while the value of exports fell by 46.94% year on year to $2.741 billion. </p> <p>   </p> <p> As a result the purchasing power index of Belarusian exports fell to 96.5% in 2020 compared to 99.1% in 2019. This index shows the change in the volume of imports that can be imported in line with the existing exports. The higher the value of this index, the higher the efficiency of foreign trade. Thus, we can note that the efficiency of Belarus’ foreign trade decreased in 2020. </p> <p>   </p> <p> Belstat characterizes the degree of commodity concentration of exports in 2020 as low. The commodity concentration of exports is 543 compared to 758 in 2019. The decrease is due to a decrease in the share of mineral fuels, oil and petroleum products in total exports of Belarus. </p> <p>   </p> <p> Growing role of Russia as major export market </p> <p>   </p> <p> Of total exports in 2020, EEU countries accounted for 48.2% (44.2% in 2019), of which Russia accounted for 45.2% (41.5%), EU countries 18.8% (18.5%) and other countries 33% (37.3%). </p> <p>   </p> <p> Imports from EEU countries accounted for 50.6% of total imports (56.2% in 2019), of which Russia accounted for 50.2% (55.8%), EU countries 19.9% (17.9%) and other countries 29.5% (25.9%). </p> <p>   </p> <p> Russia remains Belarus’ main trading partner, accounting for 47.9% of total trade in 2020 against 49.2% the year before. They are followed by Ukraine - 7.4% (8.1% in 2019), China - 7.3% (6.2%) and Germany - 4.3% (4.2%), Poland - 4%, Lithuania - 2.2%, the Netherlands - 1.7%, the United Kingdom of Great Britain and Northern Ireland - 1.6%, Kazakhstan - 1.4%, Italy - 1.3%, Turkey; USA and Brazil - 1.2% each. </p> <p>   </p> <p> Russia’s role as an export market is growing. Previously, the authorities wanted to diversify foreign trade by achieving the following ratio of Belarus’ export markets: one third to the EEU, one third to the EU, and another third to the far-abroad countries. In practice, however, this has remained unachievable for years. It is no coincidence that Foreign Minister Vladimir Makey stated in February 2021 that the export formula had to be revised. Belarus should concentrate 50% of its exports in the EEU markets and divide the remaining half equally between the EU and the far arc countries, said Makey. </p> <p>   </p> <p> In this case, the EEU is mainly Russia. The share of Belarus’ trade with the rest of the EEU countries (Armenia, Kazakhstan, Kyrgyzstan) is not so significant. </p> <p>   </p> <p> It is worth noting that in 2020 China ranked second after Russia in terms of the negative balance of trade in goods for Belarus. While for Russia, which is the main supplier of energy resources to Belarus, the negative balance amounted to $3.255 billion, for China it was $3.002 billion. </p> <p>   </p> <p> In the near term, the situation in Belarus’ foreign trade will remain challenging. The global economic recovery against the backdrop of the ongoing coronavirus pandemic is proceeding at a slow pace. At the same time, sanctions pressure on Belarus is gradually intensifying, exacerbated by internal repressions in society and forcing many companies to relocate their businesses. This is especially true for the IT sector, which accounts for a significant share of Belarus’ foreign trade surplus in services. End </p>

2021-03-10

Primepress