Boston, MA -- (ReleaseWire) -- 12/13/2012 -- We still expect a contraction in the value of the Belarusian pharmaceutical market in 2012 as a result of the devalued rouble, high inflation and weak household consumption. Belarus remains one of the most risky Eastern European markets, the economy remains vulnerable to political mismanagement and the business environment is undesirable. However, we are expecting stronger growth in 2013, with the pharmaceutical market expected to post its first year of dollar growth since 2010.
Headline Expenditure Projections:
- Pharmaceuticals: BYR3,598bn in 2011 (US$692mn) to BYR5,334bn (US$651mn) in 2012; +48.2% in local currency terms and -6.0% in US dollar terms. Local currency US dollar forecast upgraded from Q312 on the basis of updated data.
- Healthcare: BYR12,775bn (US$2.46bn) in 2011 to BYR16,305bn (US$1.99bn) in 2012; +27.6% in local currency terms and -19.1% in US dollar terms. Forecast virtually unchanged from Q312.
- Medical Devices: BYR2,174bn (US$418mn) in 2011 to BYR3,060bn (US$373mn); +40.8% in local currency terms and -10.8% in US dollar terms. Forecast virtually unchanged since Q312.
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Risk/Reward Rating: The Pharmaceutical risk/reward rating (RRR) score for Belarus increased from 44.4 in Q312 to 45.9 in Q412, due to an upgrade to the pharmaceutical market forecast. Belarus nevertheless remains as the 18th most attractive pharmaceutical market in Central and Eastern Europe, behind Serbia and ahead of Moldova. Belarus underperforms the regional average for most indicators in the proprietary ranking system, except in country rewards, which assesses factors such as urbanisation and population ageing/growth.
Key Trends And Developments:
- In September 2012, BMI moderately increased its 2012 projections for Belarus's pharmaceutical market to a 6% contraction when measured in US dollar terms (previously an 8.4% US dollar contraction). Due to devaluation of the Belarusian rouble in May and October 2011, coupled with high rates of inflation expected to average over 60% for the full year, nominal growth in Belarusian roubles is expected to be around 48% in 2012. For 2013, BMI's country risk team is not expecting a further devaluation of the currency from its current levels - a hefty unwinding of Belarus's external imbalances into Q212 indicate a stronger balance of payments position, pointing to stability in the exchange rate. We expect the pharmaceuticals market to post 9.3% growth in 2013 and 8.6% in US dollars, with inflation still elevated but less damaging than that posted in the early part of 2013.
- In the first six months of 2012, total pharmaceuticals imports into Belarus decreased by 3.5% in US dollar terms. Pharmaceuticals in finished dose form contracted by 7.9% in dollar terms from H111, while stronger vaccine imports and a moderate rise in bulk pharmaceuticals imports offset some of this larger contraction.
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