Expert says current economic downturn differs from past ones

June 18, BPN. The Belarusian economy and real income are falling, while unemployment and inflation keep rising, Uładzimir Kavałkin, founder of the Košt Urada think tank, told BPN.

According to him, the current crisis is different from earlier ones that were triggered by infusions of cash into the economy and monetary expansion. He warned that the economy is not expected to recover because of sanctions, restrictions on the movement of goods, services and capital, and limited imports and exports.

Kavałkin also noted the 4.2 percent decrease in the export of services, noting that and there are no prospects for growth after the ban of Belarusian trucks in the EU and the exodus of the IT-companies, major contributors to foreign trade in services in recent years.

Kavałkin predicted “regressive import substitution” and rolling back to the level of 1970s and 1980s instead of being some ten years behind the West. He also noted the decline in oil and raw materials imports from Russia and a reduction in consumer imports after Western companies have refused to work with Belarus and Russia.

According to the National Statistic Committee (Belstat), Belarus’ gross domestic product (GDP) fell by 3.4 percent from January to May year on year, amounting to 70.6 billion rubels at current prices (about 27.5$ billion).