Disinflation could prompt National Bank to lower interest rates in economy

May 15, 2017 12:23

According to Belstat, in April 2017 consumer prices increased by 0.7%, and since early 2017 inflation totalled 2.4%. April is traditionally characterised by seasonal growth in prices for fruit and vegetable products, which leads to an overall hike in prices for food products. Control over pricing policy is likely to persist, including through administrative means. The stability of the BYN is likely to have a stabilising effect on the prices of imported goods. Wage growth is unlikely to have a significant impact on consumer demand due to further increases in tariffs for utility and housing services. The main factor which may have an impact on price hikes, except seasonal one, is overemployment and pay rises in order to meet the president’s requirement – enterprises’ production costs would grow, hence, the final price of produces would increase. The target inflation forecast for 2017 was 9%. Currently, inflation in Belarus has slowed down to 6.3% per annum, enabling the National Bank to take further steps to reduce interest rates in the economy and help reduce enterprises’ loan servicing costs.

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Belarusian authorities manoeuvre between repression and liberalization to retain dialogue with Western capitals
May 22, 2017 13:36
Фота: Еўрарадыё

Yet Minsk has not decided on the "patriots' case" and is attempting to break new grounds in relations with the West. Meanwhile, Brussels is ready to lower cooperation levels with the Belarusian authorities in anticipation of new political prisoners to appear after the trial against former White Legion activists, irrelevant of the charges, either preparation for riots, or creation of illegal armed groups, or any other. Minsk is unlikely to cross the red line in bilateral relations with the West and new political prisoners are unlikely to appear in Belarus.

The harsh clampdown on protests and arrests this spring in Belarus are unlikely to lead to new moves by the European Union, however, the EU would closely monitor ‘some investigations’, including the ‘patriot’s case’ aka the ‘White Legion’ case.

According to human rights defenders, 17 people remain in custody, of which 16 are former members of the White Legion and one supporter of Statkevich-led the Belarusian National Committee, Sergei Kuntsevich. The law enforcement has been releasing former activists of the White Legion and members of the Patriot Club, most likely in order to mitigate criticism from Western capitals. Amid Minsk Dialogue expert conference with the participation of Belarusian and EU officials, the authorities released from custody head of the Bobruisk "Patriot" Club Nikolai Mikhalkov. In addition, the Belarusian leadership expects to ease some tension by demonstrating greater openness to a dialogue with civil society on human rights issues. For instance, for the first time the Belarusian authorities and human rights defenders held consultations on Belarus’ fifth periodic report to the UN Human Rights Committee.

The Belarusian leadership has attempted to mitigate the West’s attitude towards the criminal prosecution against former activists of the "White Legion" by adding charges of creating an ‘illegal armed formation’ to ‘preparing for mass riots’ charges.

Apparently, Minsk also gains from speculations about possible disagreements among the executives - supporters of stronger ties with Russia, and "pro-Western" reformists lead by Foreign Minister Makei. That said, the Presidential Administration and President Lukashenka have full control over the foreign policy agenda and the law enforcement.

Overall, Minsk is determined to develop relations with Western capitals. The Belarusian authorities are likely to take controversial actions, i.e. to demonstrate the desire for liberalization in some areas and occasionally tighten repressions against the opponents, however without creating new political prisoners.