Barys Zhaliba: Price rise to exceed Yermakova’s preditions

The annual inflation is expected to be more than 17%.

Such an opinion has been expressed in an interview to charter97.org website by Professor Barys Zhaliba, Doctor of Economics, who comments on the inflation rise by 8.9% over the last five months.

- In January-May this year the inflation has reached almost 9% while the authorities’ forecast of annual inflation was 11%. Why they have planned such a relatively low inflation in spite of the mistakes of the past?

- That’s because our government has a new dream every year. For example, the previous annual inflation forecast was 12%. And while it was 12% last year, it should be less this year. That means there is no scientific basis or prediction analysis at all. And we see the results: this prediction has been exceeded for the second time.

- And what prevents the National bank and the government from meeting these figures?

- That’s because of the illnesses of long standing of the Belarusian economy. That is, every month the increase of loan issue should be less than or equal to 1%, or better 0.7%. it’s a requirement of all loan holders: the IMF and the Anti-crisis foundation. But we receive more than 1% every month, so the inflation is corresponding. Besides there is a factor of the so-called state inflation. The state increases the prices for services, transportation fares, utilities charges, and it is called administrative inflation, expanded by the state itself. About two months ago Yermakova said that we would not be able to meet this prediction, and the inflation is to be 16-17% as the year before again. But with such a pace I think it will be worse.

- Will the latest loan from the Kremlin affect the problem of inflation?

- It is to have a favourable influence, as it is counted as gold and currency reserves, and as before it is to be spent on upholding the exchange rate of the Belarusian ruble. That is, when devaluation is slowed down, the ruble inflation is held back as well. However, the inflation prediction could not be fulfilled by the government by any means.