Cold weather in Belarus could interfere with plans to reduce inflation below 7% in 2017

The Economy Ministry has projected a decrease in annual inflation to 5% with a forecast of 9% for 2017. According to the results of Q1 2017, consumer prices increased by 3.4% and foodstuffs by 4.3%. When the Belarusian rouble depreciates, price for imported goods would increase and would restrain growth in household incomes. An increase in prices for Belarusian on foreign markets would lead to a gradual increase in prices on the domestic market, primarily dairy products. Unfavourable weather conditions, both in Russia and in Belarus, could have a negative impact on the yield of cereals and vegetables, which would lead to higher prices for these products and could derail the plans to reduce inflation, both in 2017 and in 2018.