Central Bank of Russia rate increases are slowing economic growth in the republic.
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Belarus's economy is facing a stagflation threat as a result of interest rate hikes by the Central Bank of Russia. The CBR's rate increases are slowing the pace of economic growth in the neighboring country. The situation reflects the economic interdependence of the two states and the impact of Russian monetary policy on the region's economy.
An increase in the key interest rate of the Central Bank of Russia creates a threat of stagflation in Belarus — a simultaneous slowdown in economic growth and persistence of inflation. Rising credit costs reduce investments and consumer demand among Belarusian enterprises oriented towards the Russian market.
Belarusian companies will face more expensive credit and shrinking demand, which could lead to rising prices amid falling incomes. For employees, this means the risk of wage stagnation against the backdrop of inflation and a freeze on new investment projects in the republic.

Mehmet Yılmaz