Inflation shock offset by pressure of shrinking domestic demand in Belarus - Sberbank
<p> MINSK, May 21 - PrimePress. The inflation shock in Belarus will be gradually offset by increasing disinflationary pressure from the shrinking domestic demand, reads an overview by the Center for Macroeconomic Studies of Russia’s Sberbank. </p> <p> </p> <p> The document says that despite the slowdown in price growth, the inflationary background in Belarus is still high. Monthly inflation was 0.6% in April 2020 after 0.8% in March. Prices of food and non-food products are rising the fastest. </p> <p> </p> <p> As a result of the low base effect (in 2019, inflation in Belarus amounted to 4.7%), annual inflation accelerated to 5.4% (in April 2020), exceeding the official forecast for 2020 by 0.4 percentage points. </p> <p> </p> <p> “In an attempt to fight increasing inflationary pressures, the government used a traditional tool for the country and at the end of March limited price growth to 0.5% (per month). Two weeks later, the conditions of price regulation changed: a list of 26 socially significant goods (ranging from toilet paper to meat) was drawn up, the importers’ surcharge on which should not exceed 10%,” said Sberbank analysts. </p> <p> </p> <p> In their view, in Belarus, such measures in the current conditions may lead to a complete halt in the supply of certain types of goods, as the cost of sales in most cases is above the established threshold. </p> <p> </p> <p> “We regard the inflation shock as a temporary process, which will be gradually leveled off by the increasing disinflationary pressure from the shrinking domestic demand,” said Sberbank analysts. End </p>
2020-05-22
Primepress
Inflation shock offset by pressure of shrinking domestic demand in Belarus - Sberbank
MINSK, May 21 - PrimePress. The inflation shock in Belarus will be gradually offset by increasing disinflationary pressure from the shrinking domestic demand, reads an overview by the Center for Macroeconomic Studies of Russia’s Sberbank.
The document says that despite the slowdown in price growth, the inflationary background in Belarus is still high. Monthly inflation was 0.6% in April 2020 after 0.8% in March. Prices of food and non-food products are rising the fastest.
As a result of the low base effect (in 2019, inflation in Belarus amounted to 4.7%), annual inflation accelerated to 5.4% (in April 2020), exceeding the official forecast for 2020 by 0.4 percentage points.
“In an attempt to fight increasing inflationary pressures, the government used a traditional tool for the country and at the end of March limited price growth to 0.5% (per month). Two weeks later, the conditions of price regulation changed: a list of 26 socially significant goods (ranging from toilet paper to meat) was drawn up, the importers’ surcharge on which should not exceed 10%,” said Sberbank analysts.
In their view, in Belarus, such measures in the current conditions may lead to a complete halt in the supply of certain types of goods, as the cost of sales in most cases is above the established threshold.
“We regard the inflation shock as a temporary process, which will be gradually leveled off by the increasing disinflationary pressure from the shrinking domestic demand,” said Sberbank analysts. End