The Government and the National Bank have, for many years, been repeating their aim that inflation must be brought down to single figures. This is extremely important to allow officials to accurately forecast the state of the economy.
Everyone agrees that all other macroeconomic figures are affected by price growth. Now, it seems that figures on price tags in the shops may rise moderately. According to the data from the National Statistical Committee of Belarus (BelStat), the consumer price index reached 112 percent, much lower than that forecast. In the middle of last year, conservative forecasts estimated a level of 116-118 percent.
The President has also often reasserted that inflation should be constrained within limits. In December, during the government session which discussed forecasts, budget and monetary policy for 2016, he admitted that though inflation had been reduced, this is evidently not enough. “We have to reduce it more actively and to reach single-digit figures. Then we’ll have macroeconomic stability and the conditions to reduce interest rates for loans,” commented Mr. Lukashenko.
According to the National Statistical Committee’s data, last year the price of food increased by 11 percent while non-food goods rose by 11.5 percent and services by 15.7 percent. Comparing price growth tendencies in 2015 and in 2014, BelStat noted a positive trend. The consumer price index at the beginning of the year was rising steadily but showed signs of a slowdown by April and only increased moderately towards the end of the year. By December, it had grown by a mere 1.2 percent. The Government may have decided to bring forward price rises to the last month of the year, for some goods and services, to avoid carrying increases into the new year’s statistics.
Meanwhile, the Government has planned modest price growth in the consumer market for 2016 of no more than 12 percent. One of the major concerns is whether this will be affected by the forthcoming redenomination of the national currency, planned to take place from July 1st. The Head of the National Statistical Committee, Alexey Yarkovets, is convinced that the ‘removal of zeroes’ will be a financially neutral process, “According to our assessments, this shouldn’t influence the level of inflation simply because we move the ‘comma’ by two decimal places. The process of redenomination shouldn’t affect price growth.”
By Andrey Govorov