Inflation Review

Inflation in Belarus accelerated in Q1-2025, and the chances of it rising closer to 8% YoY or slightly higher by the end of 2025 have increased 

Annual inflation stood at 5.9% YoY in March 2025. The annualized quarterly price growth rose to 7.3% QoQ in Q1-2025 (seasonally adjusted). Excessive domestic demand, significant growth in labor costs, high inflation in Russia combined with the weakening of the Belarusian ruble against the Russian ruble created pro-inflationary pressure. Price controls limited the extent of its pass-through to prices. Amid accumulated imbalances, the authorities significantly raised regulated prices in Q1-2025, and in April moved toward limited easing of controls.

Uncertainty has increased due to both external factors and the shift of the National Bank toward a pro-cyclical and more resistant stance to monetary tightening under the new chairman. Due to softer-than-expected monetary conditions, the inflation forecast for end-2025 has been raised to 7–9% YoY. An excessively loose monetary policy and strong external price pressure are significant risks, the realization of which could lead to inflation accelerating closer to 10% YoY.

A more detailed analysis of inflationary processes can be found in the attached document.