English

Economist warns exporters of Russia's possible recession

If one US dollar buys 60 Russian rubles or more for a long period, Russia's economy will shrink and its demand for Belarusian goods will decline, according to Iryna Tachytskaya, of the Minsk-based Privatization and Management Institute.

The Russian currency dropped to 59 rubles against the dollar on Monday, with oil prices falling to a five-year low.

"If the ruble's exchange rate [against the dollar] stabilizes at 50 rubles, our eastern neighbor's GDP may fall by two percent. If the exchange rate is at 60 rubles, it may shrink by four percent, according to estimates by Russia's Central Bank," said Ms. Tachytskaya.

She warned that Russia's economic recession would hit Belarusian exporters hard as demand for their goods in the Russian market would plummet.

Russia is the destination of 42 percent of Belarusian exports of goods. More than 90 percent of exports by companies operating under the control of the industry ministry goes to Russia.

"Our exporters' poor competitive capacity from the point of view of value for money and the diversification of markets underlies many of our problems," warned Heorhiy Hryts, deputy chairman of the Belarusian Scientific and Industrial Association. // BelaPAN