Inflation Review. Q2-2022

In Q2, inflation in Belarus remained elevated, and it is forecasted to be around 19% at the year-end.

June’s inflation was 17.6% (YoY), elevating from March’s 15.9% (YoY). High global commodity prices and the complication of supply chains increase the costs of organizations and have a pro- inflationary impact. Inflationary expectations remained elevated in Q2, while the weakening of the Belarusian ruble against a basket of currencies continued to be translated into prices. In Q2, the disinflationary impact increased through domestic demand, including due to the reduction in real wages. At the current year-end, inflation is projected at about 19%, YoY (Figure 1). Supply chain uncertainties and the probability of excessive monetary policy easing remain to be key pro-inflationary risks. Given the uncertainty, a range of 17–21% (YoY) seems realistic for inflation at the year-end in 2022.