Inflation Review. February, 2023

In 2022, for the first time in the history of Belarus, there was a decrease in consumer prices in Q4: by 6% (QoQ) (annualized seasonally adjusted change). Tightening of the State Price Regulation System lowered prices. Eventually, annual inflation slowed down to 12.8% (YoY) in December 2022. Prerequisites for inflation slowdown shaped prior to strengthening administrative monitoring: restrained domestic demand and corrective strengthening of the Belarusian ruble lowered inflationary pressure in the economy in August-September 2022 and retained their impact in Q4-2022. Annual inflation will slow down sharply in March 2023 and may temporarily drop below 5% (YoY) in the spring-summer period due to the March-April 2022 price spike being removed from the calculation. At the same time, a monthly price growth is likely to recover during the year due to the weakening effects of price regulation and due to other triggering price pressure factors. Eventually, annual inflation will accelerate towards the end of the year, and it is projected to be in the range of 7–11% (YoY) at the year end.