|
|
 |
|
Viewing report
|
|
|
|
Belarus Pharmaceuticals and Healthcare Report Q4 2011
Business Monitor International, Oct 2011, Pages: 66
Business Monitor International's Belarus Pharmaceuticals and Healthcare Report provides industry professionals and strategists, corporate analysts, pharmaceutical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Belarus's pharmaceuticals and healthcare industry.
BMI View: All indicators point to a period of prolonged economic and political upheaval in Belarus, with the pharmaceutical market battered by a combination of high inflation and currency devaluation through to the end of the year. The market retains significant long-term growth potential, although much will depend on how quickly the economy, long managed by the quixotic President Alexander Lukashenko, is able to find a new equilibrium. In the short to medium term, with the pending liquidation of state-controlled giant Belbiopharm, deep uncertainty will likely deter even the hardiest investors.
Headline Expenditure Projections
- Pharmaceuticals: BYR2,111bn (US$720mn) in 2010 to BYR2,667bn (US$666mn) in 2011; +26.3% in local currency terms and -7.4% in US dollar terms. Local currency forecast adjusted in line with continued devaluation.
- Healthcare: BYR8,763bn (US$2.99bn) to BYR10,850bn (US$2.71bn) in 2011; +23.8% in local currency terms and -9.3% in US dollar terms. Forecast adjusted downwards in line with macroeconomic situation.
- Medical devices: BYR933bn (US$318mn) in 2011 to BYR1,160bn (US$290mn) in 2011; +24.3% in local currency terms and -8.9% in US dollar terms. Forecast adjusted downwards in line with macroeconomic situation.
Business Environment Rating: Belarus ranks 18th out of 20 Central and Eastern European (CEE) markets, down from 17th in Q311, with an unchanged composite score of 46.7. The country is in the throes of a severe economic crisis that threatens to turn into a full-blown political crisis. For potential investors in the pharmaceutical sector, the current uncertainty will deter all but the hardiest. As a primary creditor, Russia and, consequently, Russian firms, are best positioned to benefit from the current crisis.
Key Trends & Developments
- The sudden decision in mid August by the Belarusian authorities to dissolve the dominant, state-owned pharmaceutical holding Belbiopharm by decree, sacking its head and putting it under the direct control of the Ministry of Health, reflects the growing crisis in the country. The stated rationale – that the move will permit the further development of the pharmaceutical industry in line with government policy – appears to conceal a deeper conflict. As BMI has noted, Prime Minister Mikhail Myasnikovich raised the possibility of Russian and Kazakhstani investment in the broader chemicals sector, including pharmaceuticals, and spoke in July of “uniting” the country’s pharmaceutical industry with the sector in Russia. The move to transform Belbiopharm into a department within the ministry, with ‘corporate rights’ would complicate any such investment or privatisation. What is clear is that the decision will do little to raise the investment attractiveness of the sector or the quality of the market regulation. It also leaves the production sector adrift.
- While the government has continued to put out positive statistics about domestic pharmaceutical production, independent news sources have published accounts of sharp price rises on the wholesale and retail level. Following the official devaluation of the official exchange rate in May, the price on the self increased by two to three-fold for many medicines, Naviny.by reported in June.
BMI Economic View: Inflationary pressures continue to build on account of the recent devaluation of the Belarusian ruble, with consumer price inflation ticking up to 43.8% y-o-y in June, up from 32.6% the previous month, and the highest headline reading on record since May 2002. For now, BMI holds to its forecast for inflation to end this year at 45.0% and to moderate back towards 15.0% in 2012, however this will be dependent on the government stabilising the currency.
BMI Political View: Recent protests in Belarus – a result of the country's ongoing economic crisis – are further evidence of the growing political threats facing the government. While the authorities have, as of yet, had little difficulty in quelling dissent, BMI stresses that given the police force’s continued use of brute force, and the fact that domestic economic conditions are expected to become significantly worse over the coming quarters, Belarus is only just entering a period of protracted political upheaval.
Product samples
A sample for this product is available. Please Login/Register to download this sample.
|
|
|
|
