Economic growth in Belarus slowed in Q2-2025 amid intensification of inflationary processes
Belarus’ GDP grew by 1.1% YoY in Q2-2025 after 3.2% YoY in Q1; seasonally adjusted quarterly growth was near zero, keeping output at a historical peak well above its balanced level. Consumer demand slowed as household lending weakened under the National Bank’s directive limits and consumer confidence declined; wage growth supported spending but slowed in real terms. Investment also decelerated amid high uncertainty about demand prospects in Belarus and Russia. The foreign trade deficit remained significant but narrowed to about 1.4% of GDP (seasonally adjusted) on positive FX effects and higher services exports, while the ruble hovered near its equilibrium level and reserves fully covered potential outflows. Labor shortages persisted (unemployment at a record-low ≈2.6%), and inflation rose to ≈10–11% QoQ (annualized, seasonally adjusted). Policy remained insufficiently focused on countering overheating; real interest rates declined, supporting credit, while credit growth was curbed mainly by directive limits on retail lending.