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Negative GDP dynamics is likely to be due to oil supply reduction to 4 million tons in Q1 2017

January 16, 2017 12:57

According to the schedule of oil supply, in Q1 2017 Belarus will receive 4 million tons of oil instead of 4.5 million tons. Oil supply has been reduced due to the lack of payment for due debt for gas supply in 2016. Due to the Russian tax manoeuver in oil refining, oil export duties are likely to reduce further and reduce the margin of oil refining in Belarus. Trade disputes between Belarus and Russia are likely to grow in number; Belarus is likely to continue to look for alternative oil supplies; wages and employment in oil refining is likely to reduce, too. Meanwhile, budget expenditure may not be affected due to the significant difference between the target price for oil in the budget and the current world market price. In Q1 2016, Belarusian refineries processed 6 million tons of oil, which created a negative environment for a considerable reduction in the wholesale trade and production of petrochemicals in 2017. Taking into account the share of oil industry in Belarus’ GDP, in Q1 2017 Belarus is unlikely to achieve the 2016 output levels.

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