Imbalances in the Belarusian economy declined by the end of 2025, but its growth potential remained low
Belarus’s GDP growth slowed to 0.3% YoY in Q4-2025, while overall the economy grew by 1.3% YoY in 2025 – three times lower than in 2023 and 2024. Slower domestic demand and subdued business activity in Russia constrained Belarus’ GDP dynamics. As a result, economic overheating declined significantly in the second half of last year, the labor shortage stopped progressing, and inflation slowed by the end of 2025 and amounted to 6.8% YoY in December 2025.
The consolidated budget was executed with a small deficit in 2025, and fiscal policy remained stimulative. Accumulated fiscal reserves will allow maintaining a high level of expenditure, but without a significant increase amid weakening economic growth prospects.
The National Bank will continue to maintain non-restrictive monetary conditions in 2026 with a focus on stimulating economic activity. In the absence of strong external shocks, a reduction of 0.25–0.75 p.p. in the refinancing rate and the average rate on ruble loans is likely during the year.
A non-restrictive economic policy will support domestic demand. However, since stimulus will not be significantly intensified, and Russian economic growth is expected to be restrained, Belarus’s GDP growth in 2026 is projected to be modest – in the range of 0.5–1.5%. Under these conditions, a slowdown in real wage growth is likely from 9% in 2025 to 3–5% in 2026.
The foreign trade position will remain in deficit at around 1–2% of GDP in 2026, which corresponds to a moderate weakening of the Belarusian ruble by 2–6% per year in terms of a basket of currencies. Inflation will temporarily slow below 6% YoY in the first half of the year, but will recover to 6–7% YoY by the end of 2026, provided that the accumulated price overhang is partially realized and the rate of increase in regulated prices and tariffs increases.
Risks to the baseline forecast remain high, primarily due to uncertainty in the external environment.
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(results of the winter survey wave)