About the price situation in the consumer market: should we wait for prices to rise?
After inflation in Belarus slowed down for six months and its lowest value in the entire history of observations in September 2023, the annual increase in consumer prices accelerated in October, and such dynamics may continue until the end of the year. Nevertheless, given the basis created earlier and the measures taken to retain price resilience in the country, there are all prerequisites to believe that inflation by the end of the year will not exceed its forecast values of 7-8%.
In October 2023, the annual increase in consumer prices was at the level of 3.7 percent. Relative to September, consumer prices rose by 0.6 percent in October. According to Belstat, food products for the month rose by 1.2%, non–food products - by 0.4%, services fell by 0.1%.
The price increase over 10 months of 2023 was 4.3%, or 0.43% on average per month. (For reference: in January-October 2022, inflation was 13.6%.) Prices for food products increased by 4.1%, non–food products - by 2.4%, tariffs for services – by 7%.
A significant contribution to the dynamics of consumer prices by the corresponding month of the previous year was expected to be made by prices for fruit and vegetable products, the growth rate of which accelerated (13.7% by October 2022 against an increase of 7.8% in September 2023 by September 2022) due to the seasonality factor.
The contribution of food products to inflation amounted to 1.8 percentage points , non–food products – (-0.1) percentage points, prices and tariffs for services – 1.9 percentage points . The current price situation is due to quite objective reasons – a planned increase in excise taxes on tobacco products (due to the need to fulfill international obligations regarding excise policy); the transfer to prices of previously increased to eliminate price imbalances in tariffs for housing and communal services; exchange rate fluctuations that affected the price of a number of imported goods and rates for international transportation. The statistical base of last year also made some contribution to the acceleration of inflation.
It should be noted that a slight increase in the monthly rate of price growth in October-December 2023 was predicted by representatives of the state economic bloc and a number of Belarusian and international analysts. Among the reasons are the withdrawal from the calculation of the low indicators of October 2022, the increased cost intensity of the production of domestic goods and services with insufficient productivity of production factors, the uncontrolled expansion of consumer demand due to wage growth and soft monetary policy, as well as high inflation expectations of the population and business.