Expert comments on Belarus govt’s failure to provide quick support to private households amid pandemic

<p> MINSK, May 21 - PrimePress. The inability of the Belarusian authorities to quickly provide support to the population is a challenge in the context of the pandemic, there are currently no working mechanisms to provide such assistance. Yekaterina Bornukova, Academic Director at the Belarusian Economic Research and Outreach Centre (BEROC), made a statement to this effect on May 21 during a webinar on the impact of the pandemic on the economy, business and households in Belarus. </p> <p>   </p> <p> Bornukova notes that the most important channel of influence of the crisis caused by the coronavirus pandemic on the Belarusian economy is the channel of external shock. </p> <p>   </p> <p> “As for the internal shock, it also matters. Despite the fact that Belarus did not introduce significant quarantine measures, people began to move less, it affects the domestic demand. The demand is affected by the decline in people’s incomes and the general atmosphere of uncertainty. Experts also see great changes in demand: there is a demand shock, it is shifting fr om one group of products to another,” she said. </p> <p>   </p> <p> “Oil shock: if we talked about oil supplies at the beginning of the year, now the low price of oil is a challenge for us, because we export oil products. The tax maneuver for us is over de facto, we pay the highest price for gas in the world, we are actually subsidizing Russia, not the other way round. We were shocked by the supply shock: supplies of intermediate goods may stop,” said Bornukova. </p> <p>   </p> <p> In her words, Belarus has also faced a fiscal shock, and it is quite big. Belarus has felt that the conditions for raising funds have significantly deteriorated in international financial markets. </p> <p>   </p> <p> “External shock: our main export positions have remained the same. Transport is not very good, it started falling in the first quarter [of 2020], this trend will continue. IT is the only sector that generated growth in the first quarter, but it is slowing down in the second quarter. Travel and tourism - there is a chance to switch to the domestic market. The oil products sector has found itself in a position wh ere the market situation makes exports less profitable: Europe and Ukraine have quarantined the demand for oil products. The food industry is our hope and support, in this area of export you can be sure of the most. But there are risks that import substitution efforts may intensify in Russia,” Bornukova said. </p> <p>   </p> <p> She also notes that Belarus has signed contracts with China and India for the supply of potash fertilizers with significant price reductions - by 24.1% and 17.8%, respectively. At the same time, there is hope for the restoration of quantitative indicators of exports. </p> <p>   </p> <p> In her words, mechanical engineering and production of vehicles may become a problem sector. These products refer to investment goods or durable consumer goods - during the crisis the demand for these goods falls in the first place. Belarus exports these products to Russia and supplies may decline. </p> <p>   </p> <p> With regard to domestic demand, Bornukova used Belgazprombank’s data on bank card spending. Expenditures are expected to decrease most in April 2020 in the categories of tourism, flights, medical services, as well as in the segment of purchases of clothing and footwear, while those in the food sector have increased. End </p>

2020-05-22

Primepress