You're reading: Belarus prices jump again in June, protests continue

MINSK, July 11 (Reuters) - Consumer prices in crisis-hit Belarus rose another 8.6 percent month-on-month in June after a 13.1 percent increase in May, adding to the government's headaches after a currency devaluation.

In year-on-year terms, consumer prices rose 43.8 percent, the state statistics office said in a statement.

The former Soviet republic devalued its rouble by 36 percent in May in an attempt to ease a balance-of-payments crisis.

The moved helped it secure a $3 billion loan from a Russian-lead regional fund last month.

Minsk is also seeking up to $8 billion from the International Monetary Fund.

While the devaluation is certain to curb imports, the resulting jump in prices has prompted public discontent in a country where relatively low wages have usually been compensated by low, state-controlled and subsidised living costs.

Thousands of Belarussians have started taking part in weekly protests against the government of President Alexander Lukashenko despite the threat of arrests and fines.

Measures taken by the government aimed at curbing inflation and preventing shortages of consumer goods were inefficient, BNP Paribas economist Julia Tsepliaeva said in a note on Monday.

"However we expect sharp slowdown in CPI in the coming months on the back of shrinking domestic demand and devaluation to be priced in," she said.

"In addition we expect further anti-inflationary measures of the central bank: new hikes of refinancing rate are very likely."

Tsepliaeva said she expected annual inflation to moderate to 35 percent by the end of this year with the central bank’s key rate rising to 24 percent from the current 18 percent.
"At the same time, to avoid sharp social tension and massive protests, the government is planning to hike salaries and wages – which may cause a new wave of inflation and require new policy response," she said.