belarus Balancing Between Zero Growth and a New Economic Downturn

The weakness of the belarusian economy at the beginning of the year is becoming systemic and cannot be reduced to isolated problems in individual sectors. According to experts from the “Belarus economy monitor” project, the country is entering a period when even the absence of new shocks will mean stagnation, and any deterioration in external conditions will mean a rapid decline.

Formally, belarus ended last year with GDP growth of 1.3%, but this figure masks a sharp decline in economic momentum. Growth rates had been declining steadily throughout the year – from 0.8% in the third quarter to 0.4% in the fourth. As a result, in the first quarter of 2026, GDP is forecast to merely repeat the level of a year ago due to weak demand in the russian market.

The main blow has been to industry, which has gone from being a source of support to a source of pressure on the entire economy. At the end of the year, industrial production fell by 1.8%. Even the growth in sales of potash fertilizers and russian oil supplies to belarusian refineries could not compensate for the collapse of key enterprises, in particular the minsk tractor plant and the belarusian metallurgical plant. In the first quarter, the decline in industry may deepen to 3–5%.

Counting on external support is not an option either. russia’s economy, on which belarusian exports critically depend, shows no signs of recovery, while forecasts for it remain even more pessimistic. Domestic demand cannot compensate for this decline: in 2025, its growth rate halved –  from 12% to 6%.

Monetary policy creates additional risks. The national bank’s focus on stimulating economic activity increases the likelihood of monetary easing as early as the first quarter, which directly threatens inflationary destabilization. Core inflation exceeded 7% at the end of the year, and the situation is likely to worsen in the coming months.

Taken together, these factors create a scenario in which negative developments for the belarusian economy are not a risk but a baseline forecast.