Prices and rumours
At a press conference of the Head of Antimonopoly and Price Policy Department of the Minsk Executive Committee Iosif Rachitsky on 5 May the rise of prices on some imported goods has been reported.
“We are monitoring the situation in 81 groups of goods. The following price changes took place in the course of the last week: prices on pasta increased by 17%, cereals by 14%, sausages by 3% and salami by 0.23%. Fish prices (Pollack, Argentina, Hake) increased by 12-16%. Prices on oranges and lemons went up by 8%. Prices on bananas went up by 3% last week, mandarins by 6%. The most significantly went up the price on coffee: by 20-47% last month, tea price increased by 38%. The price of imported wheat flour remained unchanged, while the Belarusian grew by 2%”.
Data provided by the government official regarding the price increase follows the general line of the authorities, i.e. to underestimate the problem, keep silent about the difficulties. First of all, information about the price increases reflected last week’s increase only. The official failed to quote the overall rise in prices for these goods from the beginning of the currency crisis. Namely, the imported fish has risen from a total of 30% to 50%, depending on particular type of fish with more expensive type of fish prices growing slower. The more so he said nothing about the rising prices on domestic goods: the prices on raw meat increased by an average of 20% (including chicken), bread by 10%, some kinds of bread by 30% and waffles by 30 to 40%.
The main intrigue is the inflation rate, it will be revealed by the National Statistics Committee. In May, one should expect a rise in prices on a variety of goods, particularly, on sausages and pastries, given the share of imported components in these goods reaching 40%. In May, one should expect a rise in prices on a variety of goods, particularly, on sausages and pastries, given the share of imported components in these goods reaching 40%.
An increase in the subsistence wage by 15.6% has also been reported last week (this value is a statistical unit used to calculate social benefits), however it does not cover the rise in prices over the past period and bearing in mind that this value is usually reviewed with great delay, one can expect that the gap between the growth of this index and the price index growth will continue increasing.
The country's leadership has instructed the local authorities to raise minimum wages at enterprises by the end of 2019 to BYN 1,000, which would lead to an increase in the average wage in the economy as a whole to BYN 1 500. The pace of wage growth in 2017 is insufficient to ensure payroll at BYN 1000 by late 2017 without manipulating statistical indicators. In order to fulfil the president’s order, the government would have to increase budgetary expenditures on wages in healthcare and education, enterprises – to carry out further layoffs and expand the practice of taking loans to pay wages and restrict investment in modernisation of fixed assets. In 2010, the artificial increase in wages led to a threefold devaluation in 2011, an increase in the average salary to BYN 1500 will not match the capabilities of the economy and would lead to yet another devaluation.