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Prices in Belarus will be rising toward neighboring countries' levels, deputy prime minister says

Prices in Belarus will be rising toward the neighboring countries' levels, Deputy Prime Minister Syarhey Rumas predicted at a session of the Council of Ministers in Minsk on Tuesday.

The devaluation of the Belarusian rubel earlier this year increased domestic manufacturers' costs, while the multiplicity of exchange rates creates uncertainty and prompts wholesalers and retailers to further raise prices, he said.

The deputy prime minister warned that lower prices in Belarus would continue prompting people to bring consumer goods, mainly foodstuffs, out of the country and sell them abroad.

In the first half of this year consumer prices rose by 36 percent, a record high level in 10 years, Mr. Rumas said, adding that they had increased by a further three percent in the first three weeks of July.

Economy Minister Mikalay Snapkow called for slowing down inflation. "To this end one must clearly realize what influences price growth. Prices increase when there is more money in an economy than it has earned," he said. According to the minister, wages in the Belarusian economy are too high for the current labor productivity level.

Mr. Rumas warned that in the second half of this year domestic consumption would be falling due to a drop in households' inflation-adjusted incomes. In particular, demand for non-food goods will shrink, which could lead to an increase in finished product inventories or a decrease in output, he said. //BelaPAN