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Mikhail Chyhir: Oil price fall to hit Belarus's budget

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Mikhail Chyhir: Oil price fall to hit Belarus's budget

The Russian economy is not the only one to be affected by the decrease in oil prices.

It will hit Belarus's budget revenues, GDP and other economic indicators, former PM Mikhail Chyhir told ucpb.org in an interview.

Oil prices continue to drop in international markets. BFOE oil was traded at Nymex at $88.1 a barrel and WTI oil was down to $84.38 a barrel on Monday.

Venezuela was the first to beat the alarm. Fearing serious problems, the country calls for an emergency OPEC meeting. Unlike its transatlantic friends, Belarus does not react to the news. Can the country stay far from the problems?

“No, it cannot,” Mikhail Chyhir is confident. “The decrease in oil prices will have a negative impact on the country's budget revenues, GDP and other economic indicators. Firstly, the drop in oil prices will hit Russia painfully, because its budget revenues will fall. As gas prices depend on oil prices, we can expect a decrease in gas prices, too. Gas and oil are Russia's two main sources of export income. Russia, for its part, is Belarus's largest partner, largest buyer and largest investor. Of course, the fall in oil prices will have a negative impact on trade and purchases of equipment. We should also expect investment reduction. Belarus processes and exports oil, so export earnings of Belarusian refineries will drop. It will negatively influence Belarus's budget revenues, GDP and other economic indicators.”

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