Falling incomes of population curb inflation in Belarus

According to the National Statistics Committee, inflation in Belarus was 9.2% in January – October 2016, which means that if the dynamics persists, the annual inflation target at 12% is likely to be achieved in Belarus. The main factor, which helped to curb inflation, was falling incomes of the population – by 7.1%. In order to maintain the standard of living, households sold USD 1.6 billion on a net basis. Further increases in utility costs will outpace income growth, and the BYN exchange rate would not fluctuate significantly (given there are no significant changes in the regional environment) due to the net currency supply by the population. Retail trade turnover is likely to fall short of 2015 in comparable prices. In addition, retail outlets are likely to reduce in number, so as the average ticket in the shops in dollar terms. In the next two-three months, the National Bank is likely to continue to reduce interest rates in the economy, which would be justified amid the low inflation rate in Belarus.