which of these can affect Belarus?
Due to problems with the supply of the Ukrainian executive body and the decision regarding the Russian Federation in the international declaration of a food crisis: some observations predict a surge in hunger in the regions of Africa and Asia, others talk about a multiple increase in food prices. In addition, the post-COVID recovery of the global economy is slowing down, falling oil prices are causing a devaluation race as exporting countries weaken their currencies to support economic growth. What of all this can affect Belarus and how much, Myfin.by story Academic Director of BEROC Katerina Bornukova.
Food crisis in the world. What can Belarus gain or lose in this situation?
— Belarus is a food exporter and therefore requires an increase in prices for its products. Also, part of the food was previously imported from Ukraine, but in general, our country is a net exporter of food products. If you look at the statistics, that is, how the physical volume of food exports sank a lot, but the total amount falls much more slowly. This is due to rising food prices. As for the weighted food crisis, the most balanced estimates of fears that the crisis will primarily affect developing countries: mainly the countries of South Africa, the countries – Katerina Bornukova.
In her opinion, the shortage of natural resources in Belarus will not be affected, however, the global rise in food prices, of course, will affect food.
– The impact on inflation within the country, this growth seems to be quite strong: in the basket, which, according to the calculation of the consumer price index, food products fit almost 40%. The impact of rising food prices is the most variable, even for food that is not under sanctions or species with no logistical problems. This happens simply due to the fact that, according to the expert, due to rising prices on world markets, the manufacturer will increase and increase prices for this product within the country.
The analyst believes that in the overall increase in supply in the country, the rise in food prices plays an even greater role than the increase in prices for housing and communal services or the weekly increase in the cost of fuel.
On the situation in the foreign exchange market
Net sellers of foreign currency, remaining non-residents, became available in foreign currency, all other participants became net buyers. At the same time, non-residents quite sharply increased the volume of foreign currency sales, as for the National Bank, even to fill the gold and foreign exchange reserves.
— While it is difficult to talk about any trends. Perhaps non-residents discovered high-margin transactions in the foreign exchange market in Belarus, or perhaps new schemes were opened for the re-export of goods through Belarus, says Katerina Bornukova. — By chance, if you use re-export schemes, then non-residents, most likely, will buy currency not in Belarus, but somewhere in Russia. In any case, this situation falls to the use of the National Bank of Belarus, which can buy out excess foreign currency and replenish gold reserves.
– What forecasts can be made now on the situation in the domestic foreign exchange market?
– It is obvious that the Belarusian ruble is tied to the Russian ruble: while the Russian ruble is falling, the Belarusian one is following it. But we must understand that, in addition to the Russian history with the weakening of the ruble, we also have our own problems. Belarusian exports are exported faster than imports,” Katerina Bornukova exports.
She also clarifies that, despite the slowdown in exports in May, imports still prevail over exports.
“And we remember that the delays in entry into force appeared just ended in anticipation, so the increased growth rate was even more deplorable.
We can already see by the volume of sales in the foreign exchange market, which means that import purchases significantly exceed exports. If not for the intervention of non-residents, the Belarusian ruble would have to fall significantly more. And it is not yet clear how long this phenomenon with non-residents will last: its causes are not natural, there is no sense in the forecasts of calculations for its continuation. It is quite possible that the Belarusian ruble will be forced to fall faster than the Russian ruble when the surge in foreign exchange transactions of non-residents ends.
Will high oil prices help Belarus?
Oil prices, after peaking to $120 per barrel, fell to $100-105. Can the fall in prices for black gold be export stocks of refined products from Belarus?
— Yes, we are now reducing low oil prices. The “post-COVID hype” of economic growth is gradually disappearing, resource prices are starting to decline. Plus, oil prices rose rapidly due to restrictions on the export of Russian oil. And now, against the backdrop of a cooling of sentiment and a slowdown in the growth of the economies of countries, demand for oil is also falling. This event for all economic recessions is a phenomenon – the fall in oil prices. However, the fall will not be noticeable, as there is a shortage of shortages in the global chain market. The United States has still not been able to agree with Saudi Arabia and Venezuela on an equivalent replacement of the Russian oil offer that fell out.
Answering the question about how this concerns Belarus, Katerina Bornukova says:
— D
For us, in the past, expensive oil was a plus, since we actively traded oil products on the road, and bought oil in Russia at a fixed price. Currently, we continue to buy oil at a fixed high price, and the weakening of the Russian ruble allows us to weaken after the Belarusian ruble, which ultimately helps domestic exports not only of oil products, but also of other goods exported to Russia and other countries.