Economic activity in Belarus showed restrained dynamics in Q1-2026, while GDP growth for the full year is projected to be around 1%
– Belarus’s GDP declined by 0.4% in Q1-2026 compared to Q1-2025 after growing by 0.3% YoY in the previous quarter. Compared to Q4-2025, output increased by ≈0.2% (seasonally adjusted).
– Strong consumer spending supported GDP. At the same time, output dynamics were constrained by weakening investment demand in Belarus and Russia, as well as resource limitations (primarily labor shortages). As a result, economic overheating decreased to ≈0.8% of potential GDP in Q1-2026, the balance of foreign trade in goods and services is preliminarily estimated to be close to equilibrium (seasonally adjusted), and inflation slowed to 5.4% YoY in March 2026.
– The government budget and public debt are assessed as sustainable. Government spending remained high, but budget revenues and accumulated resources were sufficient to finance it. The authorities will maintain a high level of spending this year to ensure at least modest economic growth. Accumulated fiscal reserves create favorable conditions for maintaining a stimulative policy even amid weaker prospects for increasing budget revenues.
– The National Bank maintained its focus on stimulating economic activity in January – April 2026 and relied on strict government price controls to contain inflation. Moderate inflation, low GDP growth, and the National Bank’s reliance on the current (rather than expected) state of the economy leave limited room for interest rate cuts during the year.
– Slight easing of monetary conditions and continued high budget spending will support domestic demand during the remainder of 2026. Export-oriented sectors will show restrained output dynamics due to slowing business activity in the key Russian market. Belarus’s GDP growth is projected to be around 1% YoY by the end of 2026, while real wages will increase by 5–6% YoY after growing by 9% YoY in 2025. Inflation will return to 6–7% YoY by the end of 2026, as domestic demand and the labor market will maintain moderate pro-inflationary effects.
– The external trade position is projected in deficit within 1% of GDP in 2026, which will not exert significant pressure on the ruble exchange rate. The projected foreign trade deficit corresponds to a nominal depreciation of the ruble by 2–5% in terms of the currency basket in 2026. Such exchange rate dynamics are consistent with its equilibrium trajectory.
– Risks to the forecast remain high, primarily due to uncertainty in the external environment.
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(results of the spring survey wave)