BELARUS NEWS AND ANALYSIS

DATE:

31/08/2007

Price Rises Hit Belarusian Economy

August 31, 2007 -- The higher price Belarus pays Russia for natural gas is beginning to have an effect on the country's economy.

On average, the prices of foodstuffs have risen by around 4 percent. The prices of fares on public transport have also risen.

In January, Russia's state-controlled gas monopoly Gazprom more than doubled the price it charges Belarus for natural-gas deliveries.

In the northwestern town of Hrodna, some people told RFE/RL's Belarus Service they were concerned.

"I am a pensioner, and for me, food [prices] are the main problem," one man said. "Also transport, of course. These days, I am walking."

"It's not particularly tangible, but prices are rising on products," another man said. "Vegetable-oil prices have increased by 1,000 rubles [$0.46]. Transport has also become more expensive."

Deputy Economy Minister Vladimir Adashkevich said on August 28 that the government expects the price of several products to rise within the range of 6-8 percent. This, according to Adashkevich, will happen regardless of whether Russian gas prices are raised again in the future.

Adashkevich also said that he did not know what price Russia will charge Belarus for gas in 2008, as the matter is still under discussion.

In a recent report on Belarus, the International Monetary Fund indicated that the energy price rise could result in the country's economic growth slowing by 10-15 percent of gross domestic product (GDP) cumulatively, over the period until 2012.

Source:

http://www.rferl.org/featuresarticle/2007/08/85BB18CE-2730-4A24-9A9A-EA6E8D363E10.html