Ensuring macroeconomic stability comes into increasing conflict with the ongoing monetary policy.
Monetary conditions remained stimulating for economic activity in Q3-2023. Loose monetary conditions were supported by low interest rates in the credit and deposit market, which remained below their neutral levels. Monetary stimulus became one of the drivers for GDP growth and widening of the positive output gap in Q3-2023. From the foreign exchange rate perspective, the impact on economic activity is assessed as weakly restraining in Q3-2023 due to the overvaluation of the Belarusian ruble.
The baseline scenario expects that loose monetary conditions and the National Bank’s focus on supporting output will continue in 2024. However, in order to prevent the growth of macroeconomic imbalances, it is advisable to move to the “normalization” of monetary policy in combination with the easing of price controls as early as 2023.