The Eurasian Development Bank (EDB) has updated its macroeconomic forecast for the bank’s member countries. The estimate for the growth of the Belarusian economy this year has been lowered compared with the June release. The forecast for 2026 has also been reduced.
According to the updated EDB forecast, the Belarusian economy will grow by 1.8% in 2025. In June, the bank’s analysts estimated GDP growth this year at 3%.
The forecast for Belarus GDP growth in 2026 stands at 1.8%, which is 0.1 percentage points lower than the EDB’s June estimate. At the same time, the growth estimate for 2027 has been raised by 0.5 percentage points to 2%.
It should be noted that this year the social and economic development forecast approved by a decree of Alyaksandr Lukashenka envisaged GDP growth of 4.1%, however in reality over 11 months it increased by only 1.3%. The official forecast of the Belarusian authorities for next year is GDP growth of 2.8%.
“After significant GDP growth in 2023–2024, averaging about 4%, the Belarusian economy continues to show positive dynamics. The main drivers remain consumer and investment activity. If we talk about investments, an important factor here is the government’s stimulating policy. Consumption was ensured by a real increase in wages, which rose by around 10%. This occurred in part due to the indexation of wages in the public sector, while in the private sector the key factor was a shortage of labor. Incidentally, the latter led to a reduction in unemployment to 2.4%, which is a historical minimum.
At the same time, GDP growth is constrained by weakening external demand for Belarusian exports. This has negatively affected industrial production. We see some decline. Under these conditions, by the end of the year we expect GDP growth at no higher than 1.8%. In 2026, growth rates will remain close to 1.8%.
The key source of economic expansion will remain domestic demand. Credit support mechanisms and the implementation of more than 600 investment projects will ensure positive investment dynamics.
We expect wage growth to continue. This is largely due both to the persistent labor shortage and to the planned indexation of wages for public sector employees in accordance with the budget law.
Additional support for the economy, as we believe, will come from the development of the IT sector. This is linked to growing demand for import substitution of software products in Belarus and Russia. At the same time, as we see, external demand will remain constrained. This will be a limiting factor for development next year. As economic growth in Russia, which we anticipate, accelerates in 2027–2028, GDP growth rates may increase to 2%,” said senior analyst at the EDB Country Analysis Center of the Analytical Directorate Anton Dolgovechny when presenting the forecast.
EDB estimates annual inflation in Belarus this year at 7.1%. Next year, according to the bank’s forecast, it will amount to 6.9%, and in 2027 it will slow to 6.6%.
In June, the EDB forecast that inflation in Belarus would amount to 7.7% this year and accelerate to 8.9% next year.
The government and the National Bank set an inflation target this year of no higher than 5%. In reality, it exceeds 7%. For next year, the target is for inflation not to exceed 7%.
“We believe that its level will remain close to the updated target of 7% that the central bank has set for 2026. The main pro-inflationary factors are the expansion of domestic demand and the continued growth of wages. An additional factor will be the increase in VAT in Russia, which is a key trading partner, and it is clear that price growth in Russia affects price growth in Belarus. However, the import of price pressure after its peak at the beginning of the year will gradually weaken. A moderate weakening of the Belarusian ruble will also contribute to inflation,” Dolgovechny commented on the forecast.
The EDB expects the refinancing rate to remain in the coming years at around its current level. At present, the rate stands at 9.75% per annum.
“On the one hand, inflation stabilization does not require an increase in the rate. At the same time, the National Bank, in our view, will seek to maintain positive real interest rates in order to reduce inflation. We also expect the regulator to continue the practice of using macroprudential instruments to regulate liquidity in order to restrain excessive growth in domestic demand,” the EDB representative said.
The bank also forecasts a gradual weakening of the Belarusian ruble. The average dollar-to-ruble exchange rate this year will be 3.08 rubles, next year 3.32 rubles, and in 2027 3.78 rubles per dollar on average for the year.
The forecast for the average exchange rate has been lowered compared with the June release. At that time, the EDB estimated the average annual dollar exchange rate in 2025 at 3.28 rubles per dollar, in 2026 at 3.69 rubles, and in 2027 at 4.01 rubles.
“After strengthening in the second quarter, the ruble exchange rate remains relatively stable. However, in 2026 we expect a moderate weakening and on average forecast around 3.3 rubles per dollar. In our view, pressure on the exchange rate will be linked to an expansion of the foreign trade deficit in goods.
In addition, we assume a weakening of the Russian ruble, the main trading partner, which will also put pressure on the exchange rate. On the other hand, support for the national currency will come from the volume of foreign currency supply from the population on the domestic market. In addition, we expect high growth rates of services exports to persist,” Dolgovechny added.
The combined growth of the EDB region’s economies in 2026 is estimated at 2.3%. Average inflation across the region will amount to 6.3%.
GDP growth in Armenia next year is forecast at 5.3%, Kazakhstan at 5.5%, Kyrgyzstan at 9.3%, Russia at 1.4%, Tajikistan at 8.1%, and Uzbekistan at 6.8%.
