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Belarus’ GDP dynamics improved in March amid a surge in consumer demand. Geopolitical developments may also have given the Belarusian economy a boost. This is stated in an express analysis of the Belarusian economy published by experts from the MacroBy initiative.
According to Belstat, Belarus’ GDP fell by 0.4% in January-March after a 1.2% decline in January-February.
According to MacroBy experts, gross domestic product grew by 1% in March compared with February this year. Compared with March 2025, GDP volume increased by around 1.1%.
“The main driver of the acceleration in output was a surge in consumer demand, partly associated with the realization of pent-up demand due to the weather conditions of January–February. A record warm March following the cold winter months contributed to a recovery in construction and investment overall. A pickup was also observed in manufacturing at the beginning of spring: fertilizer and petrochemical producers benefited from increased demand for their products due to disruptions to shipping in the Strait of Hormuz”, the publication said.
The authors also note that the country’s GDP in the first quarter increased by around 0.2% compared with the fourth quarter of last year. Such dynamics may indicate a stabilization of output after three quarters of slight contraction.
The overheating of the Belarusian economy continued to decline in the first quarter. It amounted to only around 1% compared with a balanced level.
“In the absence of major shocks, with a gradual recovery of growth in Russia and a correction of domestic consumer activity after the “abnormal” surge in March, cumulative GDP growth in Belarus will approach zero in the coming months and move toward +1% YoY thereafter. The “cooling” of the economy, along with easing labor shortage, creates conditions for inflation to remain close to 6% YoY”, the authors of the express analysis believe.
They also point to the first significant reduction in inventories nationwide since June 2024. The decline in inventories is linked to fertilizer and petrochemical producers benefiting from stronger external demand for their products due to complications in shipping through the Strait of Hormuz. In addition, passenger car production increased amid stronger sales on the Belarusian and Russian markets in March. Other industrial sectors continued to show weak dynamics. As a result, industrial production as a whole continued to stagnate in the first quarter.
“A reversal of the negative trend in manufacturing amid intensifying competition and the lack of spare labor resources is possible with a recovery in demand in Russia and/or an increase in labor productivity through intensified investment. The baseline scenario assumes that the Russian economy will return to modest growth in Q2-2026. This will have a positive impact on manufacturing output. However, without a significant increase in labor productivity, industrial output in the current year will, at best, remain close to last year’s level”, the publication said.
The authors also draw attention to a recovery in the information and communications sector. The gap from the peaks of early 2022 has narrowed to 10%. The IT sector will continue to recover at a moderate pace and could grow by more than 5% by the end of the year.
The authors of the analysis expect inflation to rise by the end of April because of the increase in housing and utility tariffs that was shifted to March. Belarusians will pay under the new bills for the first time in April. Price dynamics could also be affected by the war between the United States and Israel and Iran through higher fuel prices and increased logistics costs caused by shipping problems. However, the effect will be limited because Belarus buys gas at a preferential price, is a supplier of fertilizers to the global market and is a net exporter of food products.
“Overall, moderate inflation dynamics below the 7% YoY target create conditions for a slight easing of monetary policy”, the document said.