Inflation Review. Q2-2024

Inflation in Belarus remained subdued in Q2-2024, and it will be 5–7% at the end of 2024. Annual inflation increased from 5.55% (YoY) in March 2024 to 5.84% (YoY) in June 2024, and annualized quarterly price growth (seasonally adjusted) grew from 5.1% (QoQ) in Q1-2024 to 6.1% (QoQ) in Q2-2024. Inflation growth is associated with the dynamics of its non-basic component, primarily prices for fruits and vegetables, and fuel. Core inflation is estimated below 5% (QoQ) in Q2-2024 despite increasing cost-price pressures in an environment of expanding excess demand, an overheated labor market, and accelerating price growth in Russia. Blanket price controls suppressed the transfer of pro-inflationary factors into actual price increases, which maintained a significant inflation overhang.