Macroeconomic Forecast Belarus

Headline inflation, as measured by the consumer price index (CPI) hit 9.9% y-o-y in December, up from 6.8% back in June. While December's figure constituted a slight fall from November's 10.3% reading, we nonetheless see significant scope for inflation to pick up further in 2011 on account of our view for the ruble to continue weakening this year. As such, we now forecast CPI reaching 12.0% by the end of 2011 and stress that risks to this forecast are firmly to the upside.

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