Belarus: Economic and Political Overview

Economic Indicators

On February 24, 2022, Russia initiated a military conflict on the Ukrainian territory, dragging in Belarus as its ally facilitating the invasion of Ukraine, which profoundly upsets the current political context in these countries and will have substantial political and economic ramifications. For the ongoing updates on the developments of Russia-Ukraine conflict please consult the dedicated pages on BBC News.

Belarus is undergoing an economic transition, inheriting structural features from the former Soviet bloc. The country heavily relies on Russia, its largest trading partner, and to a lesser extent on Ukraine, whose economic and political situation has negatively influenced Belarus in recent years, particularly following the Russian invasion. Belarus traditionally procures gas and oil at reduced prices from Russia, and much of its growth stems from re-exporting Russian oil at market prices. Despite the growth of the private sector since the end of the Soviet bloc, it remains modest. Large subsidies to state-owned enterprises are unlikely to boost GDP growth in the short term, according to the World Bank. In 2022, Belarus's GDP decreased by 3.7% due to Western sanctions in response to its facilitation of Russia's invasion of Ukraine, leading to elevated inflation, supply-chain disruptions, limited household consumption, and hindered exports. However, according to the national statistical committee Belstat, Belarus's GDP grew 3.9% in 2023 to BYN 261.1 billion at constant prices. Nevertheless, the economy is projected to slow to 1.3% in 2024 and 0.6% in 2025 (IMF) due to persisting supply-side constraints, reduced employment, intricate supply chains, and limited technology access. Export prospects for 2024 appear dim due to anticipated declines in Russian GDP growth and diminishing price advantages in the Russian market, resulting from the Belarusian ruble's strengthening against the Russian ruble (Eurasian Development Bank).

Since the financial crisis in 2011, Belarus's economy has been influenced by significant internal and external imbalances, heavily supported by loans from Russia. Consequently, the economy is vulnerable to external shocks and fluctuations in Russia's economic performance. The debt-to-GDP ratio stood at 44.1% in 2023, up from 41.3% the previous year, and is expected to remain relatively stable, at 44.2% in 2024 and 43.3% in 2025 (IMF). Approximately one-third of the debt is held in foreign currencies, increasing risks associated with the depreciation of the Belarusian ruble. The government budget recorded a deficit of 0.2% of GDP in 2023 and is forecast to turn positive by 0.6% and 1.3% in 2024 and 2025, respectively. After peaking at the beginning of the year, average annual inflation was expected to be 4.7% in 2023 by the IMF, with a probable uptick to 5.7% this year.

Belarus exhibits relatively low levels of poverty and inequality, with a poverty rate of 4.8% according to the latest figures from the World Bank. However, the country faces uneven progress in transitioning to a market economy and democracy, and the current economic and political crisis threatens to increase poverty levels. The unemployment rate stood at 4% last year and is projected to decrease by 0.5 percentage points by 2025, according to the IMF.

Main Sectors of Industry

Belarus possesses several natural resources on its territory, including wood, minerals, small fields of oil and natural gas, granite, limestone, clay, sand, peat, and dolomite. Agriculture accounts for 7.7% of the country's GDP and employs 11% of the working population (World Bank, latest data available). The main agricultural products are beef, pork, poultry, milk, and cereals (including potatoes, vegetables, cucurbits, and seeds). Belarus is the world's third-largest producer of rye and flax fiber. The country is also among the largest exporters of butter, chicken, and cheese globally. Nearly 60% of agricultural production is concentrated in highly subsidized state-owned cooperative farms, inherited from kolkhozes, which formed the basis of the Soviet Union's agricultural policy. Belarusian agriculture heavily depends on the Russian market, to which it exports around 90% of its agricultural products. In 2023, the total agricultural output from all categories of agricultural producers amounted to BYN 33.1 billion, marking a 1.1% increase compared to the previous year when adjusted for comparable prices, according to data from the National Statistics Committee.

Industry contributes 33.2% of the country's GDP and employs around 30% of the active population. As a former country of the USSR, Belarus has a developed but ageing industrial base that is heavily subsidized. The main industries include machine tools, agricultural equipment, fertilizers, petroleum and chemical products, food products (including beverages and tobacco), prefabricated building materials, motor vehicles, textiles, and household goods equipment (such as refrigerators, watches, televisions, and radios). The manufacturing sector alone contributes 24% of the country’s GDP, mainly due to the manufacture of food products and coke and refined petroleum products. According to Belstat, in 2023, the volume of industrial production in current prices stood at BYN 187.3 billion, up by 7.7% compared to one year earlier.

The tertiary sector contributes 48.3% of GDP and has experienced significant growth since the break-up of the USSR, employing 59% of the working population. Key sectors include financial services, information technology, transportation, and tourism. Transport services, accounting for almost 42% of the country's total services exports and more than 50% of the balance of foreign trade in services, make up around 6% of GDP. Commerce is also a crucial economic sector, contributing substantially to the nation's GDP, with its proportion amounting to 9.4% in 2019, ranking second only to manufacturing (latest official government data available).

 

Breakdown of Economic Activity By Sector	Agriculture	Industry	Services
Employment By Sector (in % of Total Employment)	10.0	31.1	58.9
Value Added (in % of GDP)	7.3	32.5	47.8
Value Added (Annual % Change)	-0.4	8.4	1.4

Source: World Bank - Latest available data.

 

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Monetary Indicators	2016	2017	2018	2019	2020
Belarussian Rubble (BYR) - Average Annual Exchange Rate For 1 MUR	331.83	0.06	0.06	0.06	0.06

Source: World Bank - Latest available data.

 

 

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Indicator of Economic Freedom

Definition

Definition:

The Economic freedom index measure ten components of economic freedom, grouped into four broad categories or pillars of economic freedom: Rule of Law (property rights, freedom from corruption); Limited Government (fiscal freedom, government spending); Regulatory Efficiency (business freedom, labour freedom, monetary freedom); and Open Markets (trade freedom, investment freedom, financial freedom). Each of the freedoms within these four broad categories is individually scored on a scale of 0 to 100. A country’s overall economic freedom score is a simple average of its scores on the 10 individual freedoms.

Score:

61/100

World Rank:

95

Regional Rank:

43

Economic freedom in the world (interactive map)
Source: Index of Economic Freedom, Heritage Foundation

 

 

Foreign Trade in Figures

The Belarusian economy is predominantly state-owned, with over 70% of GDP generated by public or parastatal enterprises. Simultaneously, it remains highly open to international trade, which constitutes 122% of its GDP (World Bank, latest data available). Belarus exports a variety of products including oil and petroleum products, fertilizers, trucks and tractors, spare parts, milk and cheese, meat products, furniture and timber, and tires. A significant portion of its manufactured goods, over 60%, is exported to foreign markets. Notably, the mechanical engineering industry plays a crucial role, with 75% of goods in this segment sold outside the country (official governmental data). On the import side, Belarus primarily brings in petroleum oils, petroleum gas, motorized vehicles for passenger transport, and medicaments (data by Comtrade).

In 2022, Belarus' major trading partners included Russia (35.0%), Poland (4.0%), Ukraine (3.0%), Lithuania (3.0%), and Germany (2.0%). Conversely, imports were chiefly sourced from Russia (28.6%), China (8.1%), Germany (3.6%), Ukraine (3.4%), and Poland (2.5% - data Comtrade). Due to historical ties from the Soviet era, Belarus' economy remains heavily concentrated on the Russian market, serving as both a major outlet and supplier. Notably, in 2022, Belarus achieved a trade surplus with Russia for the first time. Recent developments have seen strengthened trade relations with China, particularly through Beijing's New Silk Road project. However, the European Union, Belarus' second-largest trading partner, withheld ratification of the bilateral partnership and cooperation agreement due to concerns over "Belarus' lack of commitment to democracy and political and civil rights."

Belarus' trade balance has experienced fluctuations in recent years. In 2022, exports amounted to USD 22.8 billion (-42.6% y-o-y) for goods and USD 9.2 billion (-10.8%) for commercial services, while imports totaled USD 38.6 billion (-6.6% y-o-y) for goods and USD 5 billion (-11.3%) for commercial services (data by WTO). The World Bank reports Belarus registered a trade surplus of 5.8% of GDP in 2022 (from 5.6% one year earlier). Preliminary figures from Belstat indicate that in 2023, the foreign trade turnover of Belarus reached USD 83.4 billion, with exports at USD 40.1 billion and imports totaling USD 43.2 billion.

Sources of General Economic Information

Ministries

Ministry of Finance (in Belarusian only)
Ministry of Energy

Statistical Office

The Ministry of Statistics and Analysis of the Republic of Belarus

Central Bank

National Bank of the Republic of Belarus

Stock Exchange

Belarusian Stock Exchange

Search Engines

Akavita
Zubr

Economic Portals

Portal of the Republic of Belarus

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