Economist: Belarus Expects Price Surge And Empty Shelves

Next year, the Russian economy will drag Belarus down.

The fact that the Lukashenka regime fully supported the Russian military aggression affected Belarus negatively. The Belarusian economy in 2022 experienced tough sanctions, a fall in GDP, rising prices and a shortage of goods.

The website Charter97.org summed up the main economic results of the year with Leu Marholin.

– The main economic and financial results of this year: we’ve managed to avoid a complete collapse of the economy. Although it seemed quite real at the beginning of the year when sanctions were imposed against Belarus.

– Well what can you say about inflation? Will it continue to grow next year?

– It would be surprising if inflation did not grow under these conditions. It almost doubled the inflation rate in previous years. Apparently, it will grow at the same pace in 2023.

The sanctions that were imposed on December 26 (oil price limitations) and sanctions that will be imposed from February 2023 on oil products, hit Russia hard. This will affect much more seriously than previous sanctions.

And since Belarus is now more dependent on Russia than ever, we can expect these sanctions to hit Belarus as well.

Accordingly, we can expect inflation, rising prices, the shelves in stores will gradually become more and more empty, and so on. This, unfortunately, is the inevitable outcome of the Belarusian state political line.

– There is a large number of debt obligations that Belarus needs to pay next year. Does Belarus face a full-fledged default?

– It depends on what is considered a full-fledged default. In a broad sense, the default is already taking place now. The fact that Belarus opened some accounts in Belarusian rubles to its creditors and started to transfer funds to them in Belarusian rubles cannot be considered a full repayment of its obligations. There are clear provisions for terms and currency of payments. No one has the right to change the currency of debt repayment unilaterally.

I think they will continue this line in 2023. It is likely that they will partially repay loans with foreign currency, if possible. However, they will mostly keep the system of assumed repayments in Belarusian rubles.

– What scenarios are possible for the Belarusian economy next year?

– According to the forecasts of the Belarusian authorities, they expect an increase of around 4.5%. The government used to develop several options, usually three of them: the most favorable one, the most unfavorable and some kind of average. They did not even bother this time. They’ve developed a single project.

This is not a forecast, this is what was once called the State Planning Commission. Can it be done? Very doubtful.

— What advice would you give to those who have bank accounts in Belarusian rubles or keep the cash?

– I gave the advice previously and I will say it again. It's better to keep in Belarusian rubles only the funds that you will need in a short term, a month, two, maximum - three months. If a person wants to save money for a longer period, then, of course, it's better to think about other options. This is real estate, some art objects, and, of course, freely convertible currency. Because despite all the predictions of the impending death of the American dollar, I think that it will outlive you and me.

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