Government can’t keep prices down

Many requests on reviewing of price and index policy in certain branches of economy lay in the Ministry of Economy and the Council of Ministers for over a month. A list of ministries and their proposals impress.

The Ministry of Economy promised to work out a “weighted and firm approach” towards all the requests on cost growth, and follows its promises so far, Radio Svaboda informs.

The Ministries of Communication, Energy, Transport, and Housing and Utilities insist on phased increase in prices.

The Ministry of Agriculture has the most enormous appetite – it asks to increase purchasing prices for all products at once. The figures are impressing – in particular, the ministry proposed to increase grain purchase prices by 72 per cent, rape seeds prices – by 125 per cent, and sugar beet prices – by 33 per cent.

The Ministry of Economy is holding the fort as yet.

Katsyaryna Peuneva, head of the price department at the Ministry of Agriculture, doesn’t say concrete figures.

“We change them every day. We changed them on Friday, but the Ministry of Economy didn’t agree with them on Monday. We have just draft plans, nothing is determined for sure – a decision, reached in the morning, may be changed by evening,” the official says.

The negotiations have been carrying on for over a month. The Ministry of Economy and the Government understand the price rise, the Ministry of Agriculture wants, will lead to uncontrolled inflation rate growth, so they don’t give their consent, Katsyaryna Peuneva says.

“We have been clearing it out for over a month. I don’t known when we will decide. Maybe when someone will bang the table with a fist. Negotiations don’t meet any results. They are harder that foreign economic negotiations…” Peuneva thinks.

Economist Zmitser Babitski says food prices growth is a world tendency, and Belarus can’t avoid it.

“It is clear that Lukashenka sets a political problem. But at the same time he is pressed by a very strong agrarian lobby. He will have to raise prices in any case. Of course, there will be some restrictions – products that are not in the list of necessities will grow in price first of all. I think the government understands people should live well, they have already forgotten what is deficit, queues. So they will make a concession and allow significant purchase prices growth, in order manufacturers can receive more money for their production,” the economist thinks.

Economists calculated that considerable increase in purchase prices will cause growth of selling prices of wheat flour by 44 per cent, rye flour by 94 per cent, bread by 20 per cent, feed-stuff by 50 per cent (it means prices of milk and meat will rise, too). But if to satisfy the demand of the Ministry of Energy, the inflation rate by the end of the year can reach 20 per cent instead of planned 8 per cent.