Belarus's 2025 GDP Growth Falls Short of Ambitious 4.1% Target, Reaching 1.3%

Economic Performance Below Expectations

Belarus's economy grew by only 1.3% in 2025, according to initial estimates from the national statistical committee, Belstat. This figure falls significantly short of the government's planned target of 4.1% for the year. The socio-economic development forecast had set an ambitious goal for the country's economic expansion.

Key Factors Contributing to the Shortfall

Several factors have been identified as contributing to the substantial gap between the projected and actual economic growth. A primary drag on the economy was the manufacturing industry, which experienced a contraction of 2.5% in 2025. This is a notable reversal from its 5.4% growth in 2024, and given that manufacturing accounts for approximately 20% of the GDP, its performance significantly impacts the overall economy.

Experts point to challenges faced by Russia, Belarus's main trading partner, as a key reason for the slump, leading to a reduction in purchases of Belarusian products. Additionally, freight transport saw a decline of 2.6%, and wholesale trade contracted by 4.9%. Weakening external demand for Belarusian exports also negatively affected industrial production.

Broader Economic Context and Official Responses

The Belarusian economy entered 2025 in a state of overheating, compounded by a persistent labor shortage. Unemployment rates were below 3% in the fourth quarter of 2024, which contributed to upward pressure on wages. Consumer price inflation accelerated to 6.8% in 2025, an increase from 5.2% in 2024. The government has set an inflation target of 7% or less for 2026.

Despite the overall slowdown, some sectors demonstrated positive growth. Retail trade expanded by 6.6%, and the catering industry grew by 5.1%. Agricultural output across all categories of farms also saw a modest increase of 0.2% in 2025. Exports of goods and services in January-May 2025 exceeded previous year's levels, with significant growth observed in deliveries to distant markets such as Africa (1.6 times), Latin America (nearly 1.7 times), and Southeast and Central Asia (25%).

Dzmitry Kruk, an expert at the BEROC research center, suggested that the Belarusian economy began to return to a state of stagnation in 2025, anticipating growth around 1.5%. He expressed skepticism regarding the authorities' forecast of 2.8% for 2026, citing potential obstacles including weak corporate finances, external deficits, and inflationary pressure. The Eurasian Development Bank (EDB) also revised its 2025 growth forecast for Belarus downward to 1.8% and projects 1.8% for 2026.