The growth of prices will slow down in H2 2019. Inflation will get stabilized close to the 5% target by the end of the year, BelTA learned from Chairman of the Board of the National Bank of the Republic of Belarus (NBRB) Pavel Kallaur on 7 August.
“Our overall estimates have not changed. The growth of prices will slow down in the second half of the year,” the official noted.
Yet the central bank does not rule out the possibility that the annual inflation in July 2019 will be higher than that in June. “But only due to the low baseline in 2018. Let me remind you that in July 2018 we registered a record high decrease in prices for fruits and vegetables. Apart from that, the schedule for raising utility rates has been changed: in July 2019 and in September 2018. This is why we may see higher inflation figures for July 2019,” Pavel Kallaur explained.
Inflation is expected to slow down in the next few months and get close to 5% at the end of the year.
The central bank believes that the domestic economy will continue having a neutral effect on the dynamics of inflation processes. It will be fostered by a decrease in consumer lending and by growing salaries based on labor productivity. When combined, these factors will curb the risk of prices going above the target.
The central bank expects the new harvest to offset the growth of food prices in H2 2019. It is also expected to reduce the probability of price spikes in the near future.
“Inflation figures are close to our expectations. We are on course to reach this year's goal. The influence of factors, which could accelerate inflation processes, has decreased. Uncertainties and risks of disruption of price stability in the future are now lower. The combination of these factors has predetermined our decision to reduce the refinancing rate by 50 basis points. It will keep the monetary policy neutral in conditions of predicted slowdown of inflation processes in the country,” Pavel Kallaur said.
In his words, while making decisions on key rates in the future the central bank will continue taking into account the entire complex of internal and external conditions as well as the effect they have on the balance of deflation and inflation factors.
BelTA reported earlier that the National Bank of the Republic of Belarus has decided to reduce the refinancing rate to 9.5% per annum as from 14 August.
