Experts see risks of Dutch disease in countries popular with relocators

Against the backdrop of an influx of relocators and capital from the Russian Federation, the countries neighboring Russia began to show symptoms of the so-called Dutch disease – a situation where the strengthening of the currency leads to the displacement of the products of national producers by more affordable imports. Analysts of the Center for Economic Forecasting of Gazprombank (CEP GPB) drew attention to this. Some experts interviewed by Vedomosti generally agreed with this point of view. But a number of analysts see no reason to record the beginning of the Dutch disease in the countries neighboring Russia.

As a rule, the emergence of Dutch disease is associated with the rapid growth of exports of any one group of goods, which ultimately leads to the loss of competitiveness of other industries. In this case, we are talking about the export of services, primarily financial ones. According to experts, the signs of the Dutch disease are most pronounced in relatively small economies – primarily in Armenia, but also in countries such as Kyrgyzstan, Georgia, Kazakhstan and Turkmenistan, where, against the backdrop of relocation and capital inflows, rapid GDP growth began with a concomitant strengthening of the national currency. . The development of the Dutch disease is fraught with shocks for these economies.