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The multinational lender also wrote in its April economic update that depreciation of the Russian ruble against the US dollar may weaken the price competitiveness of Belarusian enterprises on the Russian market, while any increase in Russia’s borrowing costs could also imply a higher cost of borrowing for Belarus.
4.2 Inflation
Inflation in Belarus stood at 0.4% month-on-month in June (vs 0.3% m/m deflation in May), and 2.9% year-on-year (vs 2.5% y/y inflation in May), according to the national statistics agency Belstat.
The National Bank of Belarus (NBB) is going to cut its key refinancing rate from 10.5% to 10% from June 27. The central bank attributed the move to the fact that "projections concerning the situation in economy, foreign trade, the currency market, and the deposit market indicate that the emerging money and credit conditions will keep inflation within the targeted range".
Earlier, the regulator's governor Pavel Kallaur said that the regulator estimates inflation will be about 6% in 2018.
Meanwhile, President Alexander Lukashenko believes that Belarus should have annual inflation 5%-6% in 2017. "This year's inflation is projected at 5-6%. Next year it is forecast at 4-5%. We should reach the inflation of 3-4% [in 2020]," he said in late April. "Prices should be kept under control."
In November, the International Monetary Fund (IMF) said that "further space for easing the monetary policy stance would be created by a tighter fiscal stance, lower quasi-fiscal activities, particularly directed lending, and wage increases consistent with productivity growth".
"For the medium term, the authorities should continue to lay the groundwork
13 BELARUS Country Report October 2018 www.intellinews.com