Belarus’s economy accelerated in Q2-2026 and will grow by 1.5–2.5% per year in the medium term
– Belarus’s GDP grew by 3% in Q2-2026 relative to Q2-2025, while for the half-year as a whole the economy grew by 1.5% YoY (+2.1% YoY over seven months). Relative to Q1-2026, output increased by more than 1% (seasonally adjusted).
– GDP growth accelerated thanks to strengthening domestic demand under the influence of government stimulation and the action of idiosyncratic factors, primarily tolling oil processing and favorable price terms of trade. Domestic demand growth again significantly outpaced the potential for sustainable output expansion, leading to an increase in economic overheating to 2–2.5% in Q2-2026.
– An increase in receipts from the Russian budget through the damper mechanism will help ensure a balanced consolidated budget for Belarus in 2026. The additional revenues will allow for an increase in government expenditure volumes and a strengthening of the fiscal impulse in H2-2026. In 2027, the volume of budget expenditures will remain high, but the impulse will weaken amid the expected reduction in transfer receipts from Russia. Under this scenario, the consolidated budget deficit will not exceed 1% of GDP in 2027, and public debt will remain close to 25% of GDP.
– Monetary policy will maintain a stimulative stance to support the government’s efforts to approach the target GDP growth for 2026 as a whole. The refinancing rate will in all likelihood be reduced from 9.25% to 8.75–9% by the end of the current year, and the rate on new market loans will decline toward 10%. In 2027, monetary conditions may ease further: the forecast increase in inflation following the easing of price controls will lead to a decline in real interest rates even with no change in nominal terms.
– GDP growth will come in close to 2–2.5% in 2026, and its dollar volume will exceed $100 bn. Fiscal and monetary stimulus will support domestic demand. It will continue to grow faster than productive potential, which is limited by a labor shortage, business environment uncertainty, sanctions pressure, and institutional constraints. As a result, the external trade position is forecast in a deficit of around 1% of GDP. Such a deficit corresponds to a weakening of the national currency by 1–3% over 2026 and 2–4% over 2027 in basket-of-currencies terms. If tolling oil processing volumes decline as domestic fuel production in Russia recovers, and the fiscal stimulus weakens against this backdrop, GDP growth will slow toward the potential rate of around 1.5% in 2027.
– Inflation is expected at around 5–6% YoY by end-2026 and 6–7% YoY in 2027. The forecast state of domestic demand, the labor market, and inflation in Russia corresponds to moderate pro-inflationary effects for Belarus. Price controls will continue to constrain price growth, but their restraining effect will weaken: in July 2026, the government removed almost all non-food goods from regulation, as a result of which the share of items regulated under Resolution No. 713 in the consumer basket decreased from approximately 45% to around 28%.
– Risks of deviations from the baseline forecast remain high and two-sided.
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(results of the summer survey wave)