Belarus release prices
Belarus abolished state regulation of retail prices to reduce budget expenditures and demonstrate its loyalty to their main lender - International Monetary Fund. Deregulation may cause price increases and a second wave of devaluation.
The Belarusian Ministry of Economic Affairs has decided this October 28, 2009 no longer regulate the prices of all goods, except for 50 socially important (pork, beef, sour cream, cottage cheese, bread, beets, onions, potatoes, etc.). Currently Belarusian state regulators set maximum allowances trade at 30-60% of the value of the goods from the manufacturer. Once the decision to the Ministry of Economy will enter into force, retailers will be able to install surcharge at its discretion.
“The refusal of state regulation of retail prices was predictable measure - says Kirill Koktysh of the Association of Political Experts and consultants. - The fact that in the first quarter of 2009 export earnings fell by 51%. But it is unlikely the situation has changed. This is income from exports form 75% of the budget of Belarus, so that loss of half of exports means an automatic loss of one third of the budget. And with emaciated state budget can not continue to subsidize social programs and maintain prices at the right level.
According Koktysh, to solve this problem only through loans is impossible. “All the more we will have to give back the loans, - the expert emphasizes. - Accordingly, the government was forced to cut public spending, in particular, by refusing to price controls, it means to cut social programs. ”
In addition, deregulation of prices has long been urged the International Monetary Fund (IMF), which since January this year, lists the money as part of Belarus stabilization loan of $ 2.5 billion
Nevertheless, the authorities still somewhat weakened control over economic processes. For example, the tax system and administrative procedures. In addition, the Belarus government has postponed the reform of value added tax, which would increase the VAT rate from 18% to 22%. Since the beginning of July, the Government lifted the state regulation of prices for essential services (laundry, dry cleaning, hairdressing, photography), as well as some food products (mainly dairy and bakery products).
