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Belarusian GDP grew by just 0.7% in August compared with the same period last year, down from 5.4% in July. The slowdown was primarily related to the timing of the harvest campaign. While agriculture contributed 2.3 percentage points to GDP growth in July, its contribution in August was already negative 0.6 percentage points. This is stated in an express analysis of the Belarusian economy’s performance over the first eight months of the year prepared by experts at MacroBy.
Last week, Belstat reported that Belarusian GDP grew by 1.9% in January-August, down from 2.1% in January-July.
MacroBy also noted that GDP growth slowed even excluding agriculture. While non-agricultural GDP grew by 3.1% year on year in July, growth was only 1.3% in August.
“The slowdown in growth was predominantly a consequence of a deceleration in manufacturing and construction. While volatility in construction activity is typical for Belarus, the slowdown in industry signals the limiting influence of investment demand in Russia and domestic resource constraints. Domestic demand, meanwhile, remained high, spurred by significant budget and quasi-budget injections and declining interest rates,” the express analysis said.
MacroBy experts expect the government to continue supporting domestic demand in the remaining months of the year.
“The forgiveness of approximately $1.86 bn of public debt in Q2-2026 will allow the authorities to more actively channel budget resources into the economy, while the decline in interest rates on loans and deposits will support consumer activity. The stimulation of domestic demand in the absence of strong external shocks will allow Belarus’s GDP to grow by 2–2.5% in 2026, but will be accompanied by an increase in the money overhang – broad money supply has a high probability of gaining more than 20% for the year as a whole. This will impede a sustained slowdown in inflation, which is expected in the range of 5–6% YoY in 2026 and 6–7% YoY in 2027,” the experts said.