russian Recession Is Dragging belarus to the Bottom

russia’s economy ended the first quarter of 2026 with a contraction and dragged belarus down with it.

According to first-quarter results, belarus’ economy shrank by 0.4%, while russia’s one contracted by 0.3%. Both countries entered 2026 with optimistic forecasts: minsk expected 2.8% growth, while moscow anticipated 1.3%. The first quarter dashed those expectations.

The situation was exacerbated by the russian monetary authorities’ fight against inflation. The central bank of russia raised the discount rate, which sharply increased the cost of loans for businesses and industry. The result was a slowdown in production in an already fragile economy.

Since belarus is firmly tied to the russian market, it is experiencing the crisis alongside its neighbor – and has no choice but to follow suit. The ambitious five-year plan for 15% growth now seems like a fantasy. Instead, the country faces the threat of stagflation: the economy is shrinking, while prices are rising.

This combination is already hitting belarusians’ wallets. Last year, a Polish grocery basket cost only by 8% more than a belarusian one, whereas just a few years ago the gap was as high as 30%. If this trend continues, belarusian shops may become more expensive than Polish ones.

It is telling that even the end of the war will not bring russia a quick recovery – the structural problems are too deep. And for belarus, the consequences may prove even more painful: while russia is “feeding” the belarusian economy during the war, after it ends, russia will look for what it can take from there. First and foremost – human capital and a share of the belarusian market, displacing local businesses in favor of russian ones.