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13 Sep 2018

New program to counter inflation adopted in Belarus

MINSK, 13 September (BelTA) – An anti-inflation program was adopted by resolution No.658/12 of the Council of Ministers and the National Bank of the Republic of Belarus on 11 September 2018, BelTA has learned.

The program is supposed to enable conditions conducive to stable economic growth, development of competition, and the reduction of inflation expectations. The document specifies measures to eliminate the existing disproportions in pricing and reduce the growth rate of administratively regulated prices and rates. The document also stipulates measures to improve the transparency and predictability of the tax policy in the medium term, encourage competition and reduce economic monopolization. The document is also designed to reduce inflation expectations and bolster trust in the economic policy of the Belarusian government.

Keeping the annual inflation at 4% is the medium-term goal. The document suggests adding the target to the program documents on Belarus’ social and economic development for another year. Plans have been made to amend the Banking Code to make the central bank responsible for securing stable prices in the country and improve its operational independence.

Measures will be taken to bolster trust in the national currency and expand the use of the Belarusian ruble in order to secure economic growth without inflation in 2018-2020. The goal will be reached by taking measures to rule out the use of foreign currency in transactions inside the country and to stop setting prices and rates in foreign currencies.

Some of the measures the anti-inflation program specifies are supposed to make prices for certain commodities, including seasonal ones, less volatile. The measures will help establish objective prices for imports, especially critical ones. Mechanisms will be introduced for the step-by-step transition to regulating prices of dominating market players with administrative measures and to enforcing medium-term rates on some services provided by natural monopolies, including taking into account earnings of citizens.

As far as the housing and utilities infrastructure is concerned, there are plans to gradually reduce cross-subsidies as from 2019. For now prices for energy resources sold to households and companies are cross-subsidized to benefit citizens. The program provides for optimizing the cost of providing housing and utility services in 2018-2020. There are plans to work out and implement a mechanism to make the nation pay 100% of the cost of utilities as from 2020.

A number of measures are stipulated to recover the cost of transportation services sold to individuals as from 2020. Belarusians are supposed to pay at least 80% of the cost of urban automobile transportation services, including at least 90% in the oblast capitals and at least 70% in Minsk. Belarusians are supposed to pay at least 65% of the cost of suburban automobile transportation services and at least 60% of the cost of transportation by rail. There are plans to adjust the procedure for setting new transportation rates to rely purely on preapproved criteria. The rates will be changed only after certain periods. Rates of urban transportation services, suburban automobile transportation services will be changed bearing in mind changes in earnings of individuals.

Belarusians are supposed to pay 100% of the cost of telecommunication services and postal services by 2020. These tariffs are regulated in line with pricing legislation. The goal will be reached by optimizing the costs to rule out a rapid increase in prices. There are plans to allow adjusting prices for mobile calls and data on the basis of preapproved criteria and after certain periods of time taking into account interests of consumers and the need to encourage investments on the part of service providers.

There are plans to introduce the registration of top retail prices for medications bearing in mind reference prices. It will rule out unjustified high prices for medications in Belarus.

In agriculture the government intends to pursue a balanced pricing policy taking into account foreign and domestic factors. There are plans to work out methods to determine purchasing prices for the agricultural products the state buys depending on processing effectiveness.

The monitoring of price changes and the total inspection of products available in retail will continue thanks to the voluntary partnership of the Antimonopoly Regulation and Trade Ministry and producers, retail associations, and public associations and thanks to digital data interchange.

The program stipulates a total of 22 measures.

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