The government started raising prices

April 22, 2016 18:06

On March 14, petrol price increased by 5%, sugar by 7%, while the overall inflation rate decreased by 3.5% since the beginning of the year. Thus, for the first time in 2012 the government started implementing the policy of administrative price rise for socially significant goods.

Inflation in Belarus is administrative by nature. As before, regulated prices rise faster than non-regulated. According to Lukashenko, the government should now “tune” the pricing policy however “there should be no avalanching price rises. The price rise should be stretched in time and correspond to the incomes growth”. Alexander Lukashenko acknowledged that “in areas of uncontrolled pricing, prices tend to fall ... that is why inflation is under control”. Thus, the tight monetary policy brought certain results, inter alia, the inflation slowdown under 2% per month. Therefore, the government started raising incomes and some prices. This policy bears high risks of inflation boosting in a few months.