Falling oil prices may ditch Belarus’ exports growth plans for 2016

In 2016, one of the criteria for measuring the government’s efficiency will be the forecast to increase exports of goods and services by 3.5%. The key Belarusian export is oil and oil products, both accounting for over 30% of Belarusian exports. The forecast parameters have been calculated based on oil price at USD 50 per barrel. In 2016, amid falling oil prices, Belarus’ exports of goods are expected to reduce compared with 2015, as well as the effective demand on the Russian market. Belarus may face difficulties with selling goods with a high proportion of energy component in the production costs (i.e. cement, nitrogen fertilizers, and petrochemicals). If exports reduce, currency proceeds will contract and the National Bank will have limited resources to mitigate currency exchange rate fluctuations on the domestic currency market.