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The European Commission on Friday asked the National Department of Agriculture to assess the damage from the Russian embargo imposed on the food supply. EU countries were the main suppliers of products now banned: on the basis of data of the FCS, of the total imports, which fell under the sanctions, the share of Europe in the past year had more than 70% (see table).
The total amount of EU food imports in Russia in 2013 amounted to approximately € 11,8 billion, including the products, which fell under the embargo, accounted for almost 40%, or € 4,5 billion. EU-wide – it’s a little, writes The Wall Street Journal. For comparison, total exports of food products from the EU in 2013 amounted to about € 120 billion.
But for the nearest neighbors Russian sanctions will be quite noticeable: some of them have already requested assistance from the European Commission, but for now – revise growth forecasts their economies.
Food and GDP
Resolution on sanctions Vladimir Putin signed on Wednesday, on Thursday became known list of goods in respect of which introduced an embargo period of one year . The prohibition also included products from the United States, European Union, Australia, Canada and Norway. It is imported fruits, vegetables, beef, pork, fish, cheese and meat products, poultry, sausages and dairy products.
The plans to complain to the WTO until Russia declared only Poland. Her Russian “punished” August 1, with a ban on imports of Polish fruit. Agriculture Minister Marek Sawicki said this week that the total loss from Poland “apple embargo” could be around € 500 million, and sought the assistance of the European Commission.
On Friday, in an interview with Gazeta Wyborcza Sawicki said that Poland is going to file a complaint against Russia and the WTO.
Poland until most seriously assess the effects of Russian sanctions on its economy: trade war with Russia could cost the country 0.5 percentage points GDP in 2014, said Deputy Prime Minister Janusz Pichochinski. Before the conflict, the government forecast assumed GDP growth of 3.3% in the current year.
In food accounts for about 11% of total exports, the share of Russia – about 4.4%. In 2013, the now banned imports from Poland to Russia exceeded € 800 million.
Another “victim” Russian sanctions – Estonia. Restrictions on trade with Russia apply to all EU countries, and therefore, to find new markets for Poland will not be easy, says analyst Tallinn division of the Swedish bank SEB Ruta Arume. Sanctions may slow down the Estonian economy by 0.3 percentage points this year, she said the agency Bloomberg. The May forecast of SEB Estonia assumed GDP growth of 0.5%.
Estonia, like Poland, faced with import restrictions before the introduction of large-scale grocery embargo. In January, because of claims by Rosselkhoznadzor ban hit dairy and fish products dozen Estonian companies, the volume of its exports are estimated at almost € 70 million. As a result, I quarter of Estonian exports to Russia have decreased by 6%. The new sanctions are likely to lead to a decline in food prices in the domestic market, which has already begun to support the deflation of consumer prices, said Arume.
Beats anxiety and Finland, for which Russia – the third largest export market with a share of about 10%.
Prime Minister Alexander Stubb, before the introduction of retaliatory measures Russian said that Finland’s economy face a crisis due to sanctions against Russia from the EU. “Potentially – and I emphasize potentially – it can become an economic crisis 2.0,” – said Stubb. Past two years, the economy is shrinking due to the crisis in the electronics and paper industry. For 2014 the official forecast of the Ministry of Finance of the country until envisages GDP growth 0,2%.
For Finland, Russia – the third largest export market, accounting for about 10% of the total Finnish exports.
The head of the Federation of the Finnish food industry Heike Eutin estimated that Russian sanctions could cost Finland about 400 million euros. According to him, in Russia is about 25% of the total Finnish exports products. Most of the products are processed, two-thirds – dairy products.
Norway is not part of the EU and yet introduced against Russia only “point” sanctions without joining the sectoral. But the country – a major trading partner of Russia, and her loss will be felt. Until this year, Russia was the largest export market for Norwegian seafood (in 2014 in the first place moved Poland). Under the “forbidden” category fell almost 80% of the Norwegian food exports to Russia worth more than $ 1 billion.
Norway will probably be selling salmon and other fish to other European markets and in the United States, but prices fall – told Bloomberg Nordea Markets analyst Kolbyorn Giskodegard.
The Russian ban on Friday, the second day in a row held in the “red zone” the Oslo Stock Exchange. The main stock index Norwegian OSEBX trading results on Thursday fell by 0.9%, on Friday fell by another 1.1%. Some manufacturers Norwegian fish products supplied only in Russia, they will have to develop new markets from scratch. Norwegian index Oslo Seafood, the calculation takes account of the shares 13 “fish” companies on Friday fell by 3.2%. On Thursday, after the announcement of the list of prohibited goods to Russia, he fell by almost 8%.
Disasters will not
According to the American consulting company Pictet, 10% -Reduce exports to Russia will cost the economies of Germany and Italy, about 0.1 percentage points GDP, France and Germany – and even less. In the case of Finland, loss could be 0.2 percentage points.
At the same effect calculates Lithuania. Impact of Russian sanctions will not be catastrophic, said Friday the country’s finance minister Evaldas Gustas. “If this process is delayed, grocery embargo could slow the growth of GDP by 0.2 percentage points,” – he said after a meeting with Lithuanian President Dalia Grybauskaite.
Current forecast Lithuanian Ministry of Finance assumes GDP growth of 3 4% in 2014. According to the state of the consulting agency Versli Lietuva, to support their country’s exporters Ministry of Finance has issued an additional $ 1 million this year. Lithuania supplies Russian dairy products, meat, animal feed. The total cost of the Lithuanian imports, which fell under the ban, is estimated at about € 270 million.
Czech economy reciprocal sanctions Russia and the EU will damage in the amount of 2.2 billion kronor ($ 106 million), said Friday at a press -Conference in Prague, Minister of Industry and Trade of the Czech Republic Jan Mladek. According to him, the exchange of sanctions may also lead to a reduction of 700 jobs in the country. But Prime Minister Bohuslav Sobotka specially stressed that while the effect of the sanctions on the economy of the Czech Republic can not be considered “significant».
Cyprus losses from the Russian embargo is estimated at approximately € 13,5 billion, said on Friday, the government Nikos Hristodulidis. Cyprus exports to Russia citrus fruits, fish, vegetables and dairy products.
Now the Cypriot authorities to discuss with representatives of the Russian ways to reduce the negative consequences for the island, said Hristodulidis. In Cyprus there is still time to find new markets, the situation for the country solvable, though serious, he added.
Greece, a major supplier of vegetables, fruits and seafood, previously evaluated the possible direct and indirect effects of “trade wars” between Russia and the EU in 4% of GDP. After the introduction of Russian sanctions Greek Ministry of Foreign Affairs announced the establishment of an ad hoc working group, which will monitor the exports from the country in Russia. It also should explore the options for increasing the supply to other markets to replace the loss on the part of Russia.
Australia will closely examine the effects of sanctions and Russian help fallen under their producers to minimize the negative impact on their business, jointly announced on Friday the country’s trade minister Andrew Robb and his colleague in the agricultural sector Bernabi Joyce.
On Friday, Central Bank of Australia lowered its GDP growth forecast for 2014-2015 by 25 percentage points to 2.5% .: and 2.0-3.0%, respectively. However, this is not due to the Russian sanctions, and with the fall of investment in the mining sector of the country and the slow recovery of other sectors of the economy.
«Russia ranks 28th place in the ranking of Australian export markets and we certainly do not rely heavily on her as a trading partner,” – said in a ministerial statement. Australia’s trade with Russia accounts for 0.4% of the total, and 1% of agricultural exports. In 2013. selskhozyaystvenny Australia exports amounted to about $ 376 million, of which fell under the ban of products for $ 182mln.
The main article of Australian exports to Russia in 2013 were meat products. Its import was banned Russia at the beginning of this year. Measure due to the fact that Australian manufacturers are using hormonal stimulants for growing cattle. In 2013, Australia has provided to Russia 27,000 tons of meat for $ 130 million. Now under embargo hit Australian dairy products and fruit.
Allen Suharevskaya Victoria Sunkina
August 10, 2014
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