Belarus’ GDP growth is expected to remain near 1% in 2026, according to a quarterly review prepared by MacroBy as part of the “Monitoring the Belarusian Economy” project.
The country’s GDP declined by 0.4% year-on-year in the first quarter, although output increased by 0.2% compared with the previous quarter.
High consumer spending supported GDP growth. At the same time, weaker investment demand in Belarus and Russia, as well as resource constraints — primarily labor shortages — restrained economic dynamics. As a result, economic overheating decreased to around 0.8% of GDP.
According to the authors of the forecast, economic activity in 2026 will maintain moderate growth rates. Slight easing of monetary conditions and continued high budget expenditures will support domestic demand. Export-oriented sectors will demonstrate restrained dynamics amid slowing economic activity in Russia.
“As a result, Belarus’ GDP growth is projected at around 1% year-on-year by the end of 2026, while real wages will increase by 5–6% year-on-year after growing by 9% year-on-year in 2025. Exhausted unused production resources, primarily labor, insufficient returns on implemented investments and the ‘bumpy’ business environment contribute to the persistence of low economic growth potential,” the forecast says.
Its authors believe the consolidated budget this year will be executed with a small deficit of about 1% of GDP. The authorities will maintain a high level of government spending in order to ensure at least modest economic growth. Accumulated fiscal reserves create favorable conditions for maintaining a stimulative policy even amid difficulties in increasing budget revenues. Financial support from Russia should ensure debt sustainability in the medium term.
The foreign trade position is projected to remain in deficit within 1% of GDP, which is not expected to put significant pressure on the ruble exchange rate.
Inflation is expected to return to 6–7% by the end of the year. It currently stands at 5.4% year-on-year.
“Risks to the forecast remain elevated, primarily due to uncertainty in the external environment. The duration and scale of the negative effects of the crisis in the Middle East are difficult to predict. In the event of a negative scenario, price pressures in Belarus will increase. At the same time, Belarus’ orientation toward Russia and China may limit the impact of the external shock, as these states are potentially less exposed to rising inflation caused by higher commodity prices compared with the EU.
Uncertainty surrounding changes in U.S. and EU sanctions policy toward Belarus and Russia also remains a risk factor for the forecast. A softer domestic economic policy than expected in the baseline scenario also cannot be ruled out. Restrained GDP growth may prompt the authorities to strengthen demand stimulus through active spending of government deposits, ‘quasi-fiscal’ operations and significant cuts in lending rates. This would temporarily boost GDP growth, but at the cost of increased inflationary pressure and a wider foreign trade deficit,” the document states.
