The Economy of Belarus is Stagnating Due to Dependence on Russia - SZRU

In the first half of 2025, Belarus's GDP grew by only 2.1%, which is 2.9 percentage points lower than the previous year. This was reported by the Foreign Intelligence Service of Ukraine.

According to SZRU, inflation reached 7.3%. The decline is explained by a shock situation in agriculture (minus 8.1% year-on-year) and a reduction in demand for Belarusian goods in Russia - the key trading partner, which accounts for 60% of the turnover. Supplies of consumer goods, equipment, and timber to the Russian Federation decreased by more than 70%.

The foreign trade deficit increased to $856 million from January to April: exports decreased by 0.3%, and imports increased by 4.7%.

'Industrial production added only 0.3%, supported by domestic demand. The stagnation of the Russian economy (minus 4% year-on-year in Q1) limits Minsk’s financial capabilities. The deterioration of the balance of payments fuels the risks of rapid devaluation of the Belarusian ruble, which will impact purchasing power and social stability,' noted the SZRU.

Future Predictions

Western sanctions restrict channels for diversification, strengthening the structural dependence on Russian markets, logistics, and financing. According to SZRU, minimal growth rates will persist until the end of 2025 due to inertia after 2024. In 2026-2027, the crisis will intensify due to falling incomes and the further dragging of the Belarusian economy into the Russian stagflation orbit.

The report of weak growth in the Belarusian economy in the first half of 2025 indicates prolonged problems caused by a shock situation in agriculture and a reduction in demand for Belarusian goods in Russia. Future predictions do not look optimistic, as further intensification of the economic crisis in the country is expected.