Inflation in Belarus accelerated moderately following the easing of price controls and is forecast at close to 5% YoY for 2026
Annual inflation rose from 4.3% YoY in June to 4.6% YoY in September 2026, while the annualized quarterly price growth increased by 1 p.p. – to 5.7% QoQ in Q3-2026 (seasonally adjusted). Inflation rose as a result of the adjustment of non-food goods prices to macroeconomic conditions following their removal from state regulation in July 2026. Pro-inflationary pressure from domestic demand and the labor market persisted, while the comparatively high harvest of agricultural crops, the appreciation of the Belarusian ruble against the Russian ruble, and the maintenance of strict price controls in the food segment constrained inflation in Q3-2026.
The “normalization” of non-food goods price growth rates will lead to a gradual recovery of inflation to the 4.8–5.3% YoY range in December 2026. The response of prices to the easing of state regulation turned out to be moderate. This gives grounds to suggest that the divergence in price growth for non-regulated services and non-food goods accumulated since 2023 was to a significant degree structural in nature, likely associated with intensified competition in goods markets due to the expansion of Russian marketplaces. The baseline scenario assumes that, in the absence of significant external shocks, inflation in Belarus will come in within the range of 6–7% YoY in 2027. Stimulative domestic economic policy, the money overhang formed as a result of its prolonged application, and the expected high wage growth will exert moderate pro-inflationary pressure. The maintenance of price controls in the food segment will continue to constrain price growth.