Aurelia Butler

With swathes of China spending April under lockdown — 46 cities according to one estimate — it was inevitable that dining out, shopping, factory output and energy usage would all take big hits.The dire data overshadowed announcements that some COVID curbs would be loosened. A Q2 economic contraction looks inevitable. What’s more, the 6.7% urban unemployment rate — the highest since 2018 — won’t escape the notice of authorities, wary of any kind of unrest. So after a series of half-hearted measures, a decisive policy response might finally be unveiled on Friday, when the People’s Bank of China meets to decide benchmark loan prime rates.The central bank will be wary however, of further weakness in the yuan, already near 20-month lows to the dollar, and the possible implications for inflation.Brent crude futures slid around 1.5 % on Monday but remain firmly above $100 a barrel. But the data has extinguished the brief spark of optimism that lifted Wall Street on Friday, with equity futures and bond yields both lower. The China-reliant Australian dollar has shed 0.7%The optimistic may point to this month’s near-30 basis-point slide in five-year inflation expectations alongside a fall in where markets price U.S. interest rates would peak. But some, such as Goldman Sachs (NYSE:GS)’ ex-CEO Lloyd Blankfein, reckon those may amount to warning signals; recession is “a very, very high risk factor,” Blankfein said on Sunday.In any case, a Friday survey showing U.S. consumer sentiment at an 11-year low bodes ill for upcoming retail sales data. Finally, last week’s big movers, crypto and Twitter (NYSE:TWTR). Bitcoin has slid a further 5% but Twitter shares — with an Elon Musk takeover now in balance — are up 1% in Frankfurt trade after Friday’s 10% tumble. Musk’s weekend tweets may not help; he said there was “some chance” over 90% of daily active users were fake accounts”. TIPS https://fingfx.thomsonreuters.com/gfx/mkt/klvyklxyxvg/Pasted%20image%201652650383583.png More

There are further signs of a slowdown in the global economy today as the impact of Covid hurts economic activity in China, the war in Ukraine hits Europe’s economy and the Federal Reserve’s efforts to control rampant inflation threaten a recession.In China, the country’s main gauge of consumer activity, retail sales, slumped 11.1 per cent year on year, compared with forecasts of a 6.6 per cent fall from economists polled by Bloomberg. Industrial production, which underpinned China’s rapid economic recovery from the initial Covid shock in early 2020, dropped 2.9 per cent.The data are the most striking sign yet of the rising economic toll from China’s zero-Covid strategy. Dozens of cities and hundreds of millions of people across China have been placed under full or partial lockdowns as part of a policy that is expected to have deep ramifications for global supply chains.Meanwhile, in Europe the EU cut its growth forecasts and lifted its inflation outlook as the energy crisis triggered by Russia’s invasion of Ukraine exacts its toll on the EU economy.Both the EU and euro area are forecast to expand by just 2.7 per cent this year — well shy of the previous expectation of 4 per cent, forecasts published by the European Commission today showed.Inflation is expected to surge above 6 per cent in both the EU and euro area this year, with some central and eastern European countries likely to see double-digit price rises in 2022.Last week, European Central Bank president Christine Lagarde signalled that she would support raising the main interest rate in July, paving the way for the first increase in the eurozone for more than a decade.In the US, where annual inflation is running at the highest level for four decades, there is a “very, very high risk” of a recession, according to former Goldman Sachs chief executive Lloyd Blankfein. Blankfein, who stepped down as Goldman chief in October 2018 but remains the Wall Street bank’s senior chair, said in an interview with CBS yesterday that corporate America and US consumers should be prepared for a recession as the Federal Reserve tightens policy to combat high inflation.Do you think the US is heading for recession? Email your thoughts to [email protected]. Here’s the rest of the day’s news — GordonFive more stories in the news1. Police say racist extremism was motive for Buffalo shooting Police said they were treating the shooting which left 10 people dead in Buffalo over the weekend as “racially motivated violent extremism” and a hate crime. The suspected gunman, 18-year-old Payton Gendron, was “a lone gunman, armed with weapons of war and a hate-filled soul”, President Joe Biden said yesterday. Meanwhile, police arrested a 60-year-old suspected of shooting one person dead and injuring five others at a meeting of Asian church goers in southern California. (NBC)

Flowers are left at a makeshift memorial outside of Tops market on Sunday in Buffalo, New York © Scott Olson/Getty Images

2. Ukrainian counter-offensive reaches Russian border Ukraine is claiming today that a counterattack has pushed Russia’s invading forces back from the eastern city of Kharkiv to the Russian border. Ukrainian forces have been battling Russian forces for weeks in fierce fighting around the country’s second-largest city. The claim could not be independently verified. Meanwhile, McDonald’s is to sell its business in Russia.3. Goldman Sachs’ senior staff given as much time off as they want Under a new “flexible vacation” scheme introduced from May 1, partners and managing directors will be free to “take time off when needed without a fixed vacation day entitlement”, the Wall Street bank told staff in a memo last month. Junior bankers have been given a minimum of two extra days of holiday per year.4. Pimco’s Dan Ivascyn says bonds becoming a bargain Investors should “get ready” to snap up bargain bonds following a bruising sell-off in debt markets last week, according to the chief investment officer of credit trading house Pimco, which manages $2tn in assets. 5. Bitcoin has no future as payments network, says FTX chief Bitcoin’s inefficiency and environmental toll prevent the cryptocurrency from being an effective means of payment, according to Sam Bankman-Fried, the billionaire founder of digital asset exchange FTX, who said the system of validating blockchain transactions could not be scaled up.More on crypto: Over Lunch with the FT, Bankman-Fried discusses whether crypto is a Ponzi scheme. The collapse of a hyped stablecoin has sparked serious questions about the entire market.The day aheadOutlook for markets Weak Chinese economic data is expected to weigh on US equity markets when they open this morning. Futures contracts that wager on the direction of Wall Street’s S&P 500 fell 0.9 per cent and those on the technology-heavy Nasdaq 100 dropped 1.2 per cent, indicating another down day following the sixth consecutive week of declines.Hedge funds Large institutional investment managers are set to disclose their equity holdings in their quarterly 13F filings. Market watchers will be watching for funds changing their positions in high-profile stocks of recent weeks and months, mostly in the technology sector.Monetary policy John Williams, president of the Federal Reserve Bank of New York, will take part in a discussion about the economic outlook at the Mortgage Bankers’ Association’s Secondary & Capital Markets conference in New York.Financial services regulation Gary Gensler, chair of the US Securities and Exchange Commission, will discuss topics affecting the markets and financial services industry at the Financial Industry Regulatory Authority’s (Finra) annual conference.US earnings Take-Two Interactive, the software company behind the Grand Theft Auto video game series, news service BuzzFeed and fitness chain F45 Training are set to report earnings.Economic data Manufacturing activity in New York state is expected to have softened, with the New York Fed’s manufacturing index forecast to drop to 17 in May from 24.6 in April, according to a Refinitiv survey of economists. Manufacturing sales and wholesale trade figures, both for March, and housing starts for April are set to be released this morning. Northern Ireland Boris Johnson will visit Belfast to try to persuade Democratic Unionists to rejoin the power-sharing executive in Stormont, but the UK prime minister will face opposition over his plans to unilaterally scrap parts of the post-Brexit treaty.Biden meets Greek PM US president Joe Biden welcomes Greek prime minister Kyriakos Mitsotakis at the White House.Correction: In Friday’s quiz one of the questions did not match the answer. We apologise for an error.What else we’re readingLet the Fed put money where it is really needed The Federal Reserve was designed just over 100 years ago for one discrete task — to ensure that the country has enough money to keep the economy growing to its full potential. But over that time it has come to backstop the global market system, Rana Foroohar argues. As a result, she says, the Fed is trying to walk an impossible line.Is Elon Musk too big to regulate? Many on Wall Street saw Elon Musk’s tweet on Friday announcing he was putting his purchase of Twitter “temporarily on hold” as a way of softening up Twitter’s management to negotiate a lower offer. But legal experts said it was another example of the Tesla chief executive flouting securities regulation, leaving him open to the SEC’s nuclear option.Crimea could be Putin’s tipping point in a game of nuclear chicken The US thinks Vladimir Putin would authorise the use of nuclear weapons only if he perceived an existential threat to Russia. But what would qualify as such a threat, asks Malcolm Chalmers of the Royal United Services Institute.Inflation returns to haunt Brazilians Inflation in Brazil is nowhere near as bad as it was in the 1980s and 1990s, when supermarkets would remark prices twice a day to keep pace with the rising prices but at 12 per cent, it is now at an almost two-decade high. And the spectre of Brazilian hyperinflation was never entirely banished.Bonuses are outdated in the age of knowledge work The idea of paying for performance is deeply ingrained. But what if the concept is flawed? Two studies suggest it is, Pilita Clark writes, given that work is more complex and collaborative than ever. Offering bonuses can even backfire.MusicAfter the scourge of the pandemic, the first Summer for the City festival is offering New Yorkers a summer to “rejoice, reclaim and remember” with an outdoor dance floor and free installations. Here are a selection of other classical concerts taking place across the US this summer.

Marin Alsop conducts the Chicago Symphony Orchestra at Ravinia © Ravinia Festival More

(Reuters) – The Senate’s sign-off last week on Jerome Powell’s second term as head of the Federal Reserve leaves the helm of the U.S. central bank in the hands of a white male, just as it has been for most of its 108-year history.But later this summer, for the first time, white men will account for fewer than half of the Fed’s policymakers.By September, eight of the 18 officials who determine monetary policy for the world’s biggest economy will be women and five will be people of color – both records – with more opportunities to diversify further in the months ahead. Moreover, the more than 100 directors across the Fed’s regional bank system, who regularly provide their views on the economy to the central bank officials responsible for setting interest rates, more closely reflect the diversity of the U.S. population than at any prior time.Still, large gaps remain. No top policymaker is now or has ever been of Latin American heritage, for instance, and newly published data https://www.federalreserve.gov/aboutthefed/economist-and-research-assistant-diversity-data.htm from the Fed shows more than half of the nearly 1,000 PhD economists whose analyses lay the groundwork for policy decisions are white men. At the Fed bank boards, where Fed policymakers have successfully pushed for better gender and racial diversity, more than 75% of directors work in the banking, financial or business sectors, with labor representation particularly thin, a report https://www.populardemocracy.org/news/publications/uneven-progress-inadequate-representation-2022-analysis-diversity-federal-reserve published on Thursday by the Center for Popular Democracy found.Some 75% of directors with business backgrounds come from large firms rather than the small companies that make up the majority of U.S. employers, the study showed. It’s enough to keep the critics on the Fed’s – and Powell’s – heels. Indeed, the Dallas Fed’s decision last week to hire a white woman as its new president rather than a Hispanic led U.S. Senator Bob Menendez, a New Jersey Democrat of Cuban descent, to oppose Powell’s confirmation to a second term. Without any Latino policymakers at the central bank, “the voices of one-fifth of the citizens of America are repeatedly drowned out when the Fed is making critical decisions on economic policy,” Menendez said in announcing his “no” vote against Powell’s confirmation on Thursday even as a wide majority of other senators backed the Fed chief. DIVERSITY AND CREDIBILITYUnder Powell, the Fed has only just begun a fight against inflation that is rising faster than in the past four decades. Policymakers are expected to deliver a series of big interest rate hikes to help cool those price pressures and bring inflation down to the Fed’s 2% target. Many economists say those rate hikes will lead to job losses as the economy slows, if not an outright recession. Any rise in unemployment historically hits people of color and low-wage or lesser-educated workers hardest.So Powell has appealed to Americans directly for their understanding, saying that he knows it will be painful but ultimately less so than allowing inflation to continue to build.Other Fed officials have similarly laid out the case for administering strong medicine now to preserve the long-run health of the labor market. “Having a leadership group that looks more like America than it ever has will help the Fed remain credible in the eyes of the public,” says Kaleb Nygaard, a senior research associate at the Yale Program on Financial Stability. “And having public confidence is one of the most important tools a central bank has.” OPPORTUNITIES TO DO MOREBut the Fed still has plenty of distance to go on the diversity road.Some 55% of the 945 PhD economists employed at the Fed are white males, according to data recently published by the central bank. One-quarter are women, a majority of whom are white. In all, the Fed employs 159 economists who identify as Asian and 89 as Hispanic or Latino. Just 14 are Black while seven identify as being of two or more races. The central bank has had much more success diversifying the boards of its 12 regional Fed banks, a change driven by the Fed’s Board of Governors, which directly picks or has at least some say over the choice of two-thirds of the directors. These directors, in turn, pick new presidents at the regional Fed banks. And their influence may already be having an effect.The Boston and Dallas Fed banks, both previously led by white men who left last fall amid an ethics scandal, have hired women as their replacements. The Boston Fed’s pick, University of Michigan provost Susan Collins, will be the first Black woman to run a regional Fed bank. The Dallas Fed board last week appointed Lorie Logan, a markets expert currently at the New York Fed, as its next chief. Logan is white.Two more Fed banks, in Kansas City and Chicago, will also soon replace their current presidents, a white woman and white man, respectively, both of whom reach mandatory retirement age next January.At the Fed’s Board of Governors, whose seven members are picked by the White House, there is also change. Last week the Senate confirmed Michigan State University’s Lisa Cook and Davidson College’s Philip Jefferson, both Black economists nominated by U.S. President Joe Biden, as Fed governors. The Fed has only had three other Black governors, with the most recent one being in 2006.”Diversity of their leadership matters, not as a gesture, not as symbolism, but as a statement of how the Fed genuinely sees themselves as … in touch with the economic interests of the country,” said Benjamin Dulchin of the Center for Popular Democracy. More

European stocks were subdued on Monday as weak economic data from China further clouded the global growth outlook. Following the longest string of weekly losses for global equities since the 2008 financial crisis, Europe’s regional Stoxx 600 share index fell as much as 0.8 per cent in early dealings, before trimming its losses to trade down 0.1 per cent. Futures contracts tracking Wall Street’s S&P 500 dipped 0.3 per cent, having sustained heavier falls in Asian and early European trading. Contracts on the Nasdaq 100 fell 0.5 per cent, signalling further declines ahead for more speculative tech stocks. The FTSE All World share index has dropped more than 11 per cent since the end of March as soaring inflation has driven central banks to raise interest rates, with investors becoming concerned that large economies are not strong enough to withstand higher borrowing costs. The downward trend for stock markets has been punctuated by short-term rallies, however, as traders hunt for bargains in sold-off sectors. “A big chunk of the global economy is basically contracting,” said Luca Paolini, chief strategist at Pictet Asset Management. “But [stock market] valuations are looking more attractive so there’s always people who will say the worst is behind us, let’s buy the market back.” “It’s a pretty ugly combination of financial conditions tightening into slowing growth,” added Hani Redha, multi-asset portfolio manager at PineBridge Investments. “In the near term the market is ripe for a relief rally,” he said, “but any bounceback is not sustainable, in our view.” Data on Monday showed Chinese retail sales dropped 11.1 per cent in April from the same month last year as a wave of stringent coronavirus lockdowns across the country reduced demand. Industrial production, which analysts had expected to rise slightly, fell 2.9 per cent. Meanwhile, Brussels on Monday cut its growth forecasts further for the euro area and lifted its inflation outlook to reflect the estimated economic impact of an energy crisis triggered by Russia’s invasion of Ukraine.Lloyd Blankfein, senior chair of Goldman Sachs, told CBS News on Sunday there was a “very, very high risk” of a US recession. The world’s largest economy contracted unexpectedly in the first quarter of the year. Consumer price inflation is also running close to a four-decade high. The US Federal Reserve earlier this month raised its main borrowing cost by 0.5 percentage points, while chair Jay Powell said moves of the same size “should be on the table at the next couple of meetings”. European Central Bank president Christine Lagarde also signalled last week the institution was ready to drop its long-held policy of keeping interest rates in the currency bloc below zero. In Asia, mainland China’s CSI 300 share index fell 0.8 per cent, while Hong Kong’s Hang Seng added 0.3 per cent and Tokyo’s Topix traded flat. Brent crude oil dipped 0.6 per cent lower to $110.92 a barrel.The yield on the 10-year US Treasury note, which moves inversely to the price of the benchmark debt security, fell 0.01 percentage points to 2.92 per cent. More

Wheat prices rose by the maximum amount allowed on Monday after India imposed a ban on exports, stoking pressure on food costs as tight global supplies roiled international markets.Futures traded in Chicago rose as much as 5.9 per cent to $12.47 a bushel, their highest level in two months. Wheat prices have risen more than 60 per cent this year, driven up by disruption from Russia’s invasion of Ukraine. The two European countries account for almost a third of the world’s wheat exports.India, the world’s second-biggest wheat producer after China, had filled a gap in markets left by decreased output from Ukraine thanks in part to a bumper harvest of 7mn tonnes last year, even as inclement weather reduced the crops of other big exporters.But after denying it would halt exports, India reversed course over the weekend after domestic inflation surged to the highest level in eight years on the back of rising food prices. New Delhi said it was introducing the ban, with some exceptions, “in order to manage the overall food security of the country and to support the needs of the neighbouring and other vulnerable countries”. “It just exacerbates the food shortage risk, particularly for developing nations and those historically dependent on foodstuffs out of that region,” said Robert Rennie, global head of market strategy at Australian bank Westpac. The sudden shift followed two months of searing heatwaves in India, with temperatures of up to 45C across swaths of the wheat belt. Relief from the annual monsoon season could still be weeks away. Soaring food and fuel prices also prompted the Bank of India to raise interest rates this month for the first time in four years.Tobin Gorey, director of agricultural strategy at Commonwealth Bank of Australia, said the wheat export ban would be a “shape shifter” for global markets.“The trade will likely need to replace at least some Indian wheat in the pipeline,” Gorey said. “We suspect that will create an initial flurry of trading but the market will take some time to assess the details.”

The export ban was announced just days after the US Department of Agriculture forecast that global wheat production would drop for the first time in four years in 2022-23. The UN World Food Programme said this month that the war in Ukraine had exposed the fragility of global supply chains to sudden shocks, with serious consequences for food security.Westpac’s Rennie said the impact of the ban was likely to hit developing markets in Africa and the Middle East the hardest, as the developed world moved to shore up supply.“It’s the humanitarian issues that are developing which, unfortunately, I think we should be more focused on,” he said. More

Carlos Vieira, a carpenter in São Paulo, hoped runaway inflation was consigned to Brazil’s past. Now, with the cost of his materials doubling in just three years, he fears those days are back. “Since I set up the workshop in 1998, I’ve never seen anything like this . . . There have always been ups and downs, but now we’re suffering from this crisis and the one before,” the 57-year-old said, referring to the Ukraine war and the pandemic.At 12 per cent, annual inflation in Brazil is now at an almost two-decade high. Triggered by the surge in global food and fuel costs, officials are increasingly concerned that price pressures are becoming entrenched across the economy.Roberto Campos Neto, central bank governor, told reporters in April that a sharp rise in the cost of items such as clothing and eating out in recent months “came as a big surprise”. Inflation is nowhere near as bad as it was in the 1980s and 1990s, when supermarkets would remark prices twice a day to keep pace with the rising prices. After surging to a record 4,500 per cent in the year to June 1994, measures ranging from the introduction of a new currency, the real, to granting the central bank independence, helped bring price pressures under control.

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But the spectre of Brazilian hyperinflation was never entirely banished. Many contracts — covering everything from rented accommodation to the supply of raw materials — still contain automatic adjustments, a legacy of the times where prices and wages routinely rose by between 30 and 40 per cent a month.Some contracts, such as those for rents as well as telephone and electricity charges, use the alternative measure of wholesale inflation, which at 15 per cent is significantly higher than the consumer price index.The wholesale measure, which is weighted towards producer prices, was above 40 per cent for much of last year, putting pressure on businesses such as Viera’s carpentry workshop. He said his margins had been squeezed by almost a third over the past three years. The prevalence of these inflation-linked contracts is hampering efforts by the Brazilian central bank to bring inflation under control and raises the risk of prices spiralling. Alessandra Ribeiro, economist at Tendências, a consultancy in São Paulo, said: “The battle is that much harder and the central bank has to be more aggressive.”Inflation is nowhere near as bad as it was in the 1980s and 1990s, when supermarkets would remark prices twice a day to keep pace with the rising prices © Julio Pereira/AFP/Getty ImagesBanishing inflation was a battle that, until recently, the central bank seemed to have won. Brazil’s policymakers, who were early adopters of inflation targeting, had won enough credibility to cut the benchmark Selic rate to just 2 per cent in 2020. That trend is now in reverse.The Selic has been raised 10 times since March last year to 12.75 per cent. An 11th rise is expected to take the rate to 13.25 per cent next month. To make matters worse, the central bank’s increases threaten to choke off demand and trigger a recession. Growth is already anaemic and there is a high prospect of a serious bout of stagflation, where inflation soars and output stagnates. Output this year is predicted to grow just 0.7 per cent, according to a central bank survey of market economists. The prediction for next year is barely any better, at just 1 per cent.

Brazil’s government in March hastily cut fuel taxes after lorry drivers staged the latest in a series of protests at rising diesel prices © Filipe Araujo/AFP/Getty Images

Meanwhile, moves by their US counterparts look set to place monetary policymakers in Brazil in a bind where they can do little to put growth back on track. While the real has strengthened against the dollar this year, rate rises from the Federal Reserve in the coming quarters threaten to undermine those gains.In such a climate, cutting rates risks a fall in the currency, raising the cost of imports and leading investors to ditch assets. “At some point central banks [in the region] will have to cut rates,” said Alberto Ramos, head of Latin American economic research at Goldman Sachs in New York. “But some time in 2023 the [Fed] is going to be in full hiking mode. It’s going to be very difficult for those central banks to cut while the Fed is hiking.”While Brazil’s problems are exacerbated by its history of high inflation, they are not unique. Prices are rising fast across emerging markets at an average annual rate of almost 14 per cent, twice that of advanced economies. Argentina’s headline inflation is running at close to 60 per cent a year. The pain is particularly acute for poorer people, who spend a relatively large part of their income on food and are exposed to sharp rises for products such as household fuels used for cooking and heating, which are up by more than 30 per cent in Brazil. Higher energy prices have also sparked unrest. In March, Brazil’s government hastily cut fuel taxes after lorry drivers staged the latest in a series of protests at rising diesel prices, blocking highways with burning tyres. “There is absolutely no doubt that inflation is a tax, and a socially regressive tax, that disproportionately affects low-income households,” said Ramos. “It is a serious problem everywhere in Latin America.” More

HONG KONG (Reuters) – The dollar started the week just off a 20-year high against peers on Monday, as investors sought safety due to fears about global growth while cryptocurrency markets appeared to find some stability after last week’s turmoil.The dollar index was at 104.54, having briefly crossed the 105 level on Friday, its highest since December 2002, after six successive weeks of gains.Investors have flocked to the safe-haven currency on concerns about the U.S. Federal Reserve’s ability to dampen inflation without causing a recession, along with worries about slowing growth arising from the Ukraine crisis and the economic effects of China’s zero-COVID-19 policy.”Broad USD strength is being supported by a mounting global growth concern,” said Barclays (LON:BARC) analysts.They said events to watch this week included U.S. retail and production data due Tuesday, as well as public remarks from several Fed officials.”Focus will be on any potential reiteration/pushback on the notion that 75-basis point rate hikes are off the table for now.” Markets are pricing in 50 basis point hikes at the Fed’s next two meetings, according to CME’s Fedwatch tool, but with the possibility of larger increases.Chinese retail and production data due later on Monday are also top of the agenda.”A weaker growth outlook in China is likely to keep commodity G10 currencies under pressure and the USD supported,” said Barclays. The euro started the week languishing near its lowest level since early 2017, suffering due the strong dollar and because of the European economy’s exposure to the Ukraine conflict.The single currency was at $1.0398 on Monday morning, only just above the $1.0354 level it hit on Thursday, its lowest since early 2017.There are also plenty of speeches from top European Central Bank officials this week for investors to watch. Sterling, which has suffered along with the euro, was at $1.2256 on Monday, having dropped as low as $1.2156 last week, hurt by softer than expected first quarter GDP figures. In the coming week, Britain has labour market data, inflation and consumer confidence data.The Japanese yen was a little softer on Monday morning at 129.43 yen per dollar. Last week it managed its first week of gains since early March, as growth fears meant U.S. Treasury yields paused their march higher.With yields pinned down in Japan, the yen is vulnerable to higher U.S. yields.Crypto markets, which trade around the clock, had a quiet weekend after turmoil last week driven by TerraUSD, a so-called stablecoin, broke its dollar peg.Bitcoin was trading around $31,000 having dropped to $21,400 on Thursday, its lowest since December 2020. More

Belarus and Russia were hit by sanctions after Moscow sent tens of thousands of troops into Ukraine on Feb. 24 from Russian and Belarusian territory in what it called a “special military operation” designed to demilitarise and “denazify” its neighbour.Ukraine and the West say the fascist allegation is baseless and that the war is an unprovoked act of aggression.”Because of the sanctions, almost all of Belarus’s exports to the countries of the European Union and North America have been blocked,” Golovchenko said, according to a transcript of an interview with the Dubai-based Al Arabiya television published by the Belta state news agency. “This … comes to about $16 billion to $18 billion a year.” President Alexander Lukashenko has insisted that Belarus must be involved in negotiations to resolve the conflict in Ukraine, saying also that Belarus had been unfairly labelled “an accomplice of the aggressor”.Belarus was also heavily sanctioned last year following the interception of the Ryanair plane flying between Athens and Vilnius and the arrest of a dissident journalist and his girlfriend after the plane landed. (Reporting in Melbourne by Lidia Kelly; Editing by Stephen Coates) More