Temporary factors led to a decline in Belarus’ GDP at the beginning of 2026, but even excluding them economic activity dynamics were subdued and growth potential remained low
In January 2026, GDP declined by 1.25% compared with January 2025 and decreased by ≈1.4% relative to December 2025. The reduction in output at the beginning of the year was partly correctional following the sharp growth at the end of 2025, driven by the expected entry into force of a number of regulatory changes in Russia and longer New Year holidays in the neighboring country. The climate factor also had a significant impact on GDP dynamics: the coldest January since 2010 led to an increase in power generation, but at the same time negatively affected investment activity (especially construction), mining industry, output in a number of manufacturing sectors, catering, and some service sectors.
Despite monthly output volatility and the influence of temporary factors, the Belarusian economy remains on a “sideways” trajectory. Domestic demand is slowing after overheating in 2023 – the first half of 2025, while the external impulse from the Russian market has been exhausted amid declining investment activity in Russia. As a result, GDP will be close to the level of the previous year or slightly below it in Q1-2026 and will show modest growth of 0.5–1.5% for 2026 as a whole, provided that non-restrictive monetary and fiscal policies are maintained and there is no downturn in Russia. Under these conditions, inflation is expected to be slightly below 6% YoY in the first half of the year and around 6–7% YoY by year-end.