Фото: Reform.by
Inflation in Belarus could accelerate to 5–6% by the end of the year, according to the latest monthly review by MacroBy. Annual inflation stood at 4.3% in June.
“A strong ruble and strict state price regulation continued to restrain consumer goods inflation. At the same time, prices for non-regulated services continued to rise at a rapid pace due to persistently inflationary conditions in domestic demand and the labor market,” the review said.
In July, the government reduced the list of price-regulated goods under Resolution No. 713. As a result, the share of regulated goods in the consumer basket fell from about 45% to approximately 28%.
“The easing of price controls amid strong consumer demand and significantly higher labor costs will be accompanied by the release of accumulated inflationary pressure. At the same time, the baseline scenario forecasts only a moderate acceleration of inflation to 5–6% year on year by the end of the current year. A similar divergence between goods and services inflation in Russia during 2023–2026 suggests that the exceptionally low growth in non-food goods prices in recent years was not solely the result of state regulation, but also reflected a regional phenomenon associated with the rapid development of e-commerce and the expansion of Russian online marketplaces in the Belarusian market,” the report’s authors wrote.
At the same time, they noted that developments in Russia’s fuel market pose a risk to the forecast.
“Inflation could remain at the lower end of the forecast range if prices for non-food goods respond only moderately to the easing of price controls and if fruit and vegetable prices remain lower this year than they were last year. The latter will largely depend on weather conditions, but as of the end of July, prospects for the harvest are considered favorable.
In 2027, inflation is expected to remain close to 6–7% year on year. Some easing of market-driven price pressures will be offset by a greater pass-through of these pressures into goods prices as state regulation is further relaxed,” the review said.
Belarus’s official inflation target for this year has been set at no more than 7%.