S&P has assessed the consequences of Brexit for Russia

S&P has assessed the consequences of Brexit for Russia

From 13 countries in Eastern Europe Russia the least affected by the decision of the UK leaving the European Union, report of international rating Agency S&P Global Ratings Heat map Brexit: what would be the impact on emerging Europe?” (have).

S&P analysts estimated the impact of the outcome of the referendum in the UK on 13 countries: Bulgaria, Hungary, Poland, Romania, Russia, Slovakia, Czech Republic, Slovenia, Latvia, Lithuania, Estonia, Croatia, Turkey. Countries were assigned scores from 0 to 100 according to factors such as the number who moved to the United Kingdom nationals (as a percentage of the number of the remaining population), as well as remittances and exports of goods and services (percentage of GDP). In addition, the study authors took into account the extent to which a country depends on financing from the European structural funds given the fact that the UK is the second biggest payer to the EU budget after Germany.

For all factors Russia gained 0.01 points (for all criteria, except the ratio of exports to GDP, the country received zero points. Russia is ahead of Turkey, which scored 0.31 points (largely through exports).

The two largest emerging European economy has been least affected by decisions about Brexit, the report said. These countries are not EU members and do not receive money from the structural funds unit, and also have large diasporas in the UK, which would provide a significant flow of remittances, the study authors explained. However, they recognize that their available data on the number of Turkish labour migrants in the UK may be significantly understated.

Most exposed to Brexit S&P experts called Lithuania (3.44 points) and Latvia (3,32). The vulnerability of Latvia and Lithuania, they explain a substantial number of migrants in the UK relative to their population (5.4% in Lithuania and 5.3% in Latvia) and the volume related cash flows (1.2% in Lithuania, 0.8% in Latvia). “According to our estimates, more than one out of every 20 citizens of these countries living and working in the United Kingdom,” — noted in the study.

In General, the countries of the region in the event of a Brexit will lose less than the richer countries of Western Europe, says S&P. In the short term the direct impact of Brexit on the countries in Eastern Europe will be limited. But over time, the decline in EU funds may hamper the prospects of growth in the region, according to the study.

Residents of the UK in a referendum on June 23 voted for the country’s withdrawal from the European Union. Supporters of Brexit won with 51.9% of the votes. June 27, S&P downgraded Britain’s credit rating at once on two lines: from the highest AAA to AA with negative Outlook, explaining the forecast increase in risks to the economy, the budget and the role of the British pound as an important reserve currency. 30 June rating Agency due to the results of the referendum downgraded the credit rating of the EU level AA+ to AA.