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08 February 2024, 09:35

MART: No goal to stop the economic growth of companies

Aleksei Bogdanov
Aleksei Bogdanov
MINSK, 8 February (BelTA) – Belarusian Minister of Antimonopoly Regulation and Trade Aleksei Bogdanov spoke about Council of Ministers' Resolution No. 713 “On the price control system” and its effectiveness in an interview to Belarus 1 TV Channel, BelTA has learned.

“When assessing the document, there was a lot of talk about the market mechanism, whether it was good or bad,” Aleksei Bogdanov said. “Let's take a look at why such a document was developed and whether the market mechanism coped with the situation, in which our country found itself in 2022. We remember that logistics chains were disrupted then, there were problems with supplies, currency, payments and so on. Most importantly, prices were rising, inflation was predicted to be around 20% by the end of 2022. Therefore, it was decided to develop a price control system.”

According to Aleksei Bogdanov, the system has proved its effectiveness. “In late 2022 inflation went down by almost 6% from its forecasts. In 2023, with the decree valid throughout the year, we even exceeded the plan: the task was 7-8%, and prices increased by no more than 5.8%” he said. “Indeed, the price growth slowed down, with the price situation in trade restrained. Most importantly, we observed deflation in some months, i.e. prices decreased to the level of the previous year.”

“The decree itself, which regulates the consumer market pricing today, is built on the principle that the main revenue part is distributed to the producers of both raw materials and processing enterprises,” he emphasized. “For trade, suppliers, importers, there are strict limits of marginal markups, they cannot raise them. For example, a store has a limit of no more than 15%. Moreover, different markups apply to different goods depending on the turnover, the shelf life of the goods. This must also be taken into account. We cannot financially starve the trade.”

“Therefore, if a manufacturer has a need to raise prices by more parameters than it is established today in the decree, there is such a mechanism. First, it is necessary to give a clear economic justification of what went wrong: costs, import component, exchange rate difference and so on. Secondly, this justification must be submitted to the relevant government body, which makes a decision and authorizes in certain cases to increase the cost more than the parameters established by the decree. There is no task to stop the economic growth of the enterprise,” Aleksei Bogdanov said.
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