Belarus

The economy contracted by 0.4% in the first quarter, while growth of 1.2% is expected for the full year 2026. Key reasons of this weakness are the slowdown of the Russian economy and declining investment. Inflation stood at 5.4% in March (full-year forecast: 6.4%). The IMF expects a smaller budget deficit than provided for in the budget law, yet dependence on Russian support remains high. The negative trade balance is leading to a current account deficit of -2.7% and depreciation pressure. Trade is increasingly decoupling from the EU and reorienting more strongly toward Russia/China. Sanctions on potash exports caused net losses of USD 394 million in 2022–24. The effects of the Iran conflict have not been noticeable so far.