Inflation Accelerated: Belarus Introduced Strict Price Regulation for Food and Medicine

Were managed.

The government has imposed significant restrictions on price increases for socially important goods and some medicines. So, until the end of February, manufacturers, suppliers, and trade were prohibited from raising prices, and from March 1 - no more than 0.2% per month, tut.by writes.

Recall that a similar decision was introduced in 2020 (restrictions on price increases were 0.5% per month), which excited the market, after which it was canceled. The current decision of officials was preceded by an increase in the VAT on medicines, medical devices, and some products, including due to which retail prices rose, and annual inflation in January accelerated even more than in December.

Earlier, the government, announcing plans for 2021, said that they intend to tightly control prices and imports, but they assured that this would be done "by economic methods, not prohibitive."

What did the officials change

By the decision of the government, legal entities of all forms of ownership and individual entrepreneurs who produce, import, or sell socially important essential goods to the domestic market were prohibited from raising prices until the end of February (compared to those that were in effect on the 24th of this month). With the absence of goods on this date - on the previous date excluding discounts. This is stipulated by the Resolution of the Council of Ministers No. 100 "On temporary measures to stabilize prices for socially important essential goods."

From March 1, the change in prices for socially significant goods of the first need cannot exceed 0.2% per month. The price for these goods on the last day of the previous month is taken as a basis (and if this product was not available, then the product of the same variety and packaging is taken as a basis).

An increase in prices above 0.2% per month is allowed only upon agreement with the commission on state regulation of pricing under the Council of Ministers.

Officials explain that they are introducing this unpopular decision to "stabilize the price situation for socially important essential goods and saturate the consumer market with them."

What goods and medicines are we talking about?

Restrictions on price increases are imposed on products and non-food items that are included in the list of socially significant ones. There are 62 positions in total. Among other things, this is rice, buckwheat, oatmeal, barley, millet, bread, pasta, beef, pork, some sausage, live fish, some dairy products, eggs, potatoes, instant coffee, tea, sugar, salt, toilet soap, toilet paper, diapers, matches.

The list of drugs for which price increases were limited included 50 items. Among others, these are Amoxicillin, Azithromycin, Analgin, Arpetol, Xylin, Omeprazole, Essentikaps. Certain manufacturers of these drugs are listed.

Who will be responsible for fulfilling the order of the government?

The Ministry of Agriculture, the Ministry of Health, Belgospischeprom, other republican state bodies and state organizations that are subordinate to the government, regional executive committees, and the Minsk city executive committee were instructed to "take measures to implement this resolution and ensure supplies to trade facilities and pharmacies for the needs of the domestic market of products produced by subordinate organizations." At the same time, it is necessary "to take systemic measures to analyze and monitor prices along the entire chain of their formation (establishment), to issue local legal acts on the organization of work to stabilize prices with the establishment of a clear system for monitoring and evaluating the work of personnel."

MART and the Ministry of Health, if necessary, should adjust the assortment lists of goods and drugs that must be on sale.

How a similar decision was made in 2020 and what (not) came of it

To stabilize the situation in the consumer market, the government at the beginning of April last year limited the growth of prices for manufacturers, importers, and retailers to 0.5% per month. At the same time, the range, according to the plans of the authorities, should not have been reduced. Market participants said that meeting these requirements is extremely difficult, including due to the rise in the dollar.