Prices Refused To Obey Lukashenko

Inflation is out of control.

Prices in Belarus do not only refuse to listen to the government. They also refuse to follow traditions. In July, annual inflation rose, despite the seasonal decline in prices of fruits and vegetables. Two and a half years of price regulation have created an inflationary canopy, which is slowly sliding right over their heads, writes planbmedia.io.

According to the National Statistics Committee, inflation in annual terms rose to 7.4% on August 1. A month ago, price growth was 7.3 percent. The increase seems to be small. One could say, even almost symbolic. But the problem is that taking into account the season it should not be in principle.

Say, a year ago, the annualized price growth in July was 5.5 percent, down 0.3 percentage points compared to June. Inflation in monthly terms then amounted to less than a symbolic three hundredths of a percent.

Because July and August is the traditional season of low prices. On the one hand - vacations, on the other hand - seasonal decrease in prices for fruits and vegetables. Say, in the same Russia in July this year inflation in annualized terms fell to 9.02 percent. And the last two weeks of the month the country experienced deflation.

And in Belarus there was no deflation. Thanks to the seasonal reduction of prices, the foodstuffs actually rose in price by only two hundredths of a percent during the month. Prices for non-food products rose by 0.1%. But services rose in price by 0.7 percent. As a result, prices rose by 0.2 percent over the month, adding to inflation in annual terms.

The real test for Belarusian inflation will be August. Because in August seasonal prices fall the most. Traditionally, August in Belarus has almost always been a month when inflation was replaced by deflation.

But this year the tradition may be broken. In July, according to the National Bank, prices for seasonal fruits and vegetables were 14.5 percent higher than in July last year. They added half a percent to overall inflation. A year ago, seasonal prices, on the contrary, contributed to the reduction of annual inflation.

But this year, firstly, the weather was bad, and secondly, the Belarusian inflation has accumulated too much potential. And this potential will definitely not allow it to stay within the limits of 5.5% set by the government.

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