According to the Polish Economic Institute’s estimates, the EU sanctions will cover 54% of Belarusian export to the EU, which could lead to a 5% drop in the country’s GDP this year. The annual value of the exports covered by the sanctions is around USD 2.9 billion (based on data from 2020). The sanctions’ impact on groups of products will vary.

Exports of wood and wood products will suffer the most, as the sanctions will cover 67% of the value of exports of these products. The EU also accounts for a high share of Belarusian exports of cement products, as well as goods made out of iron and steel – around 35% of foreign sales were on the EU market. The forecast that the restrictions will lead to a 5% drop in GDP assumes that Belarusian producers will not shift goods that are not sold in the EU to alternative markets.

A European Council decision on 2 March 2022 broadened the scope of the existing sanctions in connection with Belarus’ involvement in the Russian invasion of Ukraine. This includes further restrictions on trade in goods used to manufacture tobacco products, mineral products, products containing chloride, wood products, cement products, iron products and steel products, as well as rubber products and machines.

The restrictions cover products for which EU imports play a relatively big role. In 2020, Belarus accounted for 17.4% of deliveries of goods containing potassium chloride from outside the EU, as well as almost 9% of deliveries of wood and cement products. In the other groups of products covered by the sanctions, Belarus’ share did not exceed 1%.

“The sanctions will have a strong impact on Belarusian exporters. In terms of trade between Poland and Belarus, they cover goods for which imports from Belarus were worth USD 689 million per year – 59% Polish imports from this country in 2020 (and a quarter of the EU imports covered by the sanctions). Taking into account all Polish imports (including those from within the EU), Belarus accounted for 17% of deliveries of cement products to Poland, 22% of deliveries of products containing potassium chloride, and 13% of wood and wood products. The disruptions will therefore concern deliveries of products where there is already an imbalance on the market, resulting in high prices. The import of certain products was related to the fact Belarusian producers’ price competitiveness resulted from less stringent environmental standards. As a result, Polish producers of, for example, cement could benefit from this situation by obtaining new orders in Poland and the EU,” said Łukasz Ambroziak, a senior advisor on the global economy team at the Polish Economic Institute.

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The Polish Economic Institute is a public economic think tank dating back to 1928. Its research primarily spans macroeconomics, energy and climate, foreign trade, economic foresight, the digital economy and behavioural economics. The Institute provides reports, analyses and recommendations for key areas of the economy and social life in Poland, taking into account the international situation.

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