Inflation in Belarus to range 7-8% in coming months – EDB
<p> MINSK, Feb 2 - PrimePress. Inflation in Belarus will be in the range of 7-8% in the coming months, the Eurasian Development Bank (EDB) says in its monthly macroeconomic review. </p> <p> </p> <p> The increase in food prices due to higher prices on the global market and smaller vegetable crops in Belarus was the key factor in the acceleration of inflation in December 2020 to 7.4% fr om 6.6% in November 2020. Increases in communication and transport tariffs also largely contributed to the acceleration of inflation in December. </p> <p> </p> <p> In the coming months, inflation is projected to be in the range of 7-8%. Annual growth of consumer prices will continue to be affected by the weakening of the Belarusian ruble in 2020 and the rise in food prices. An additional inflationary factor will be an increase in VAT on the import and sale of some consumer and medical goods. “According to our calculations, the direct contribution of these measures to inflation will be 0.5-0.6 percentage points in 2021. Annual inflation will begin to slow down in the second half of the year because of weak demand and the exhaustion of the effects of the exchange rate and food prices,” the bank says. </p> <p> </p> <p> Belarus’ GDP decreased by 0.9% in 2020. In November-December 2020, economic activity was driven by the manufacturing industry and wholesale trade amid increased output in some export-oriented industries. Consumer demand contracted in November and December, while investment demand remained weak. These factors will continue to lim it economic activity in Belarus in the short term. </p> <p> </p> <p> The review points at a decline in consumer demand in Belarus at the end of 2020. “Consumer activity is constrained by a slowdown in household income growth, social distancing, and a reduction in retail lending. Under the influence of these factors, consumer demand will remain low in early 2021,” reads the review. </p> <p> </p> <p> Bank experts see the weak investment activity in Belarus. Capital investment fell by 22% in December, spending on machinery, equipment and vehicles by 29.7%. </p> <p> </p> <p> “Investment demand is negatively affected by increased uncertainty, reduced lending to the private sector, deteriorating economic sentiment and the financial performance of enterprises. As a consequence, investment activity will remain low in 2021. Besides, the business climate in Belarus can be affected by the Western sanctions,” the EDB says. </p> <p> </p> <p> The Eurasian Development Bank (EDB) is an international financial institution founded by Russia and Kazakhstan in January 2006 with the mission to facilitate the development of market economies, sustainable economic growth, and the expansion of mutual trade and other economic ties in its member states. The EDB charter capital totals US $7 billion. The bank’s member states are Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan. End </p> <p> </p>
2021-02-03
Primepress
Inflation in Belarus to range 7-8% in coming months – EDB
MINSK, Feb 2 - PrimePress. Inflation in Belarus will be in the range of 7-8% in the coming months, the Eurasian Development Bank (EDB) says in its monthly macroeconomic review.
The increase in food prices due to higher prices on the global market and smaller vegetable crops in Belarus was the key factor in the acceleration of inflation in December 2020 to 7.4% fr om 6.6% in November 2020. Increases in communication and transport tariffs also largely contributed to the acceleration of inflation in December.
In the coming months, inflation is projected to be in the range of 7-8%. Annual growth of consumer prices will continue to be affected by the weakening of the Belarusian ruble in 2020 and the rise in food prices. An additional inflationary factor will be an increase in VAT on the import and sale of some consumer and medical goods. “According to our calculations, the direct contribution of these measures to inflation will be 0.5-0.6 percentage points in 2021. Annual inflation will begin to slow down in the second half of the year because of weak demand and the exhaustion of the effects of the exchange rate and food prices,” the bank says.
Belarus’ GDP decreased by 0.9% in 2020. In November-December 2020, economic activity was driven by the manufacturing industry and wholesale trade amid increased output in some export-oriented industries. Consumer demand contracted in November and December, while investment demand remained weak. These factors will continue to lim it economic activity in Belarus in the short term.
The review points at a decline in consumer demand in Belarus at the end of 2020. “Consumer activity is constrained by a slowdown in household income growth, social distancing, and a reduction in retail lending. Under the influence of these factors, consumer demand will remain low in early 2021,” reads the review.
Bank experts see the weak investment activity in Belarus. Capital investment fell by 22% in December, spending on machinery, equipment and vehicles by 29.7%.
“Investment demand is negatively affected by increased uncertainty, reduced lending to the private sector, deteriorating economic sentiment and the financial performance of enterprises. As a consequence, investment activity will remain low in 2021. Besides, the business climate in Belarus can be affected by the Western sanctions,” the EDB says.
The Eurasian Development Bank (EDB) is an international financial institution founded by Russia and Kazakhstan in January 2006 with the mission to facilitate the development of market economies, sustainable economic growth, and the expansion of mutual trade and other economic ties in its member states. The EDB charter capital totals US $7 billion. The bank’s member states are Armenia, Belarus, Kazakhstan, Kyrgyzstan, Russia, and Tajikistan. End