Belarus to be affected by world inflation
In spite of its specificity and isolation, the Belarusian economy suffers from inflation just as much as open economies do. Inflation can be observed in any modern economy. If its level is low, it normalizes the economy. However, a high inflation or deflation rate (the decrease of the price level) can affect it negatively. Now we are observing the highest inflation rate over the past 10-25 years in many countries of the world. Economists are alarmed.
The inflation in Belarus is rather high now: 4.1% for three months. Let us remind you that the government planned 6 or 8% for the whole year. The inflation of 4 or 6% per year is considered admissible. Everything exceeding this number poses a threat to the economy of any country. The inflation rate may total 9% in China and in Ukraine and 14% - in Russia this year. A high inflation rate is expected in EU member states and in the USA. ERB has asked an economist Zmitser Babitski whether it will affect the Belarusian economy taking into account that it is isolated and specific. “It will” – claims the economist.
Babіtskі: “The price of imported mineral oil has a great influence on it. The authorities are increasing wages all the time. However, wages are part of prices so prices of all goods are also increasing. The price of food is increasing in the international market. The government has to increase prices for food too, otherwise they will be exported from the country”.
ERB: “They say that two world’s workshops – India and China that seem to be producing everything – have caused the inflation. We are friends with China. Will we get any benefit from it? Will they help us fight the inflation?”
Babіtskі: “There is some other logic. They are producing more and more. India and China are making more and more money. So they start consuming more. As a result, world prices are rising. There are a lot of people living there because the markets are very big. It affects us too because our domestic prices are increasing together with world prices. Our cooperation or the lack of cooperation are not that important. Moreover, our cooperation with these countries is not really important”.
Let us remind you that inflation (it can be translated from Latin as “fraud”) is a process when money channels are flooded with money supply. A price rise and the devaluation of a monetary unit follow it in most cases.
The inflation in Belarus is rather high now: 4.1% for three months. Let us remind you that the government planned 6 or 8% for the whole year. The inflation of 4 or 6% per year is considered admissible. Everything exceeding this number poses a threat to the economy of any country. The inflation rate may total 9% in China and in Ukraine and 14% - in Russia this year. A high inflation rate is expected in EU member states and in the USA. ERB has asked an economist Zmitser Babitski whether it will affect the Belarusian economy taking into account that it is isolated and specific. “It will” – claims the economist.
Babіtskі: “The price of imported mineral oil has a great influence on it. The authorities are increasing wages all the time. However, wages are part of prices so prices of all goods are also increasing. The price of food is increasing in the international market. The government has to increase prices for food too, otherwise they will be exported from the country”.
ERB: “They say that two world’s workshops – India and China that seem to be producing everything – have caused the inflation. We are friends with China. Will we get any benefit from it? Will they help us fight the inflation?”
Babіtskі: “There is some other logic. They are producing more and more. India and China are making more and more money. So they start consuming more. As a result, world prices are rising. There are a lot of people living there because the markets are very big. It affects us too because our domestic prices are increasing together with world prices. Our cooperation or the lack of cooperation are not that important. Moreover, our cooperation with these countries is not really important”.
Let us remind you that inflation (it can be translated from Latin as “fraud”) is a process when money channels are flooded with money supply. A price rise and the devaluation of a monetary unit follow it in most cases.
