Belarus’ economy accelerated in Q1-2025 due to stronger domestic demand
Belarus’ GDP grew by 3.1% in Q1-2025 compared to Q1-2024, following an increase of 2.5% YoY in Q4-2024. After adjusting for seasonal factors, quarterly GDP growth is estimated at ≈1.7–1.8% QoQ in Q1-2025 — significantly above the growth rate of potential GDP, so the scale of economic overheating reached its highest level since mid-2014. Domestic demand remained the key driver of GDP growth at the start of the year, with household consumption up by ≈3% versus Q4-2024 and investment by more than 5% QoQ (seasonally adjusted). The negative trade balance in goods and services is preliminarily estimated at around 2.5% of GDP for January–March 2025 (seasonally adjusted). Despite the large foreign trade deficit, international reserve assets grew to a historical maximum. Labor shortages remained acute, pushing real wages about 35% above the 2021 average. Inflation accelerated to around 7.3% in Q1-2025 (annualized, seasonally adjusted). Domestic economic policy remained expansionary; interest rates stayed only slightly above neutral, and given lingering effects of past low rates, monetary conditions continued to support excess demand, while the National Bank’s prioritization of credit support over macroeconomic stability raises the risk of volatility if external conditions deteriorate.