Population 9.4 million
GDP 7,295 US$
Country risk assessment
Business Climate
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major macro economic indicators

  2020 2021 2022 (e) 2023 (p)
GDP growth (%) -1.0 2.6 -8.0 -2.7
Inflation (yearly average, %) 5.5 9.5 15.6 11.0
Budget balance (% GDP)* -2.9 -1.7 -4.5 -2.3
Current account balance (% GDP) -0.2 2.7 -1.5 -1.1
Public debt (% GDP)* 48.0 41.2 36.7 37.9

(e): Estimate (f): Forecast *Off-budget operations and secured debts of public enterprises included


  • Well-developed transport network: bridgehead for China’s Silk Road, due to its favourable geographical location between Russia and Europe
  • Relatively well trained and skilled workforce
  • Large industrial (31% of GDP in 2020) and agricultural (10% of GDP) sectors
  • Little inequality and poverty is rare


  • Harsh sanctions by the West on the country after it gave Russia the full support for its invasion of Ukraine
  • Very high political and economic (energy, trade and financial) dependence on Russia
  • Low geographical and sectoral diversification of exports
  • Sensitive to the level of petroleum product prices (purchase price negotiated with Russia)
  • State plays a massive role in the economy (1/2 of total value added, 2/3 of total employment)
  • Poor governance (high corruption, weak legal system, institutional rigidity, absence of pluralism)
  • Monetary policy is not independent, the central bank reports directly to the President
  • Shrinking labour force

Risk assessment

In the middle of the Russia-Ukraine conflict

The economic outlook for Belarus this year changed dramatically after Russia invaded Ukraine, with the full support of Belarus, on 24 February. Russia used the Belarusian territory as a base to fire ballistic missiles, and send air and ground troops. In addition, the Russian army is fully supported by the economic infrastructure and supply of Belarus. The U.S. and the UK (Belarus’ TOP 11 and TOP 5 export partners, respectively) reacted to this via sanctions targeting 24 individuals and entities, as well as 2 state-own banks. The EU (TOP 2 export partner, receiving 19.3% of all Belarusian exports) went further and targeted 42 individuals (freezing their assets and implementing a travel ban), but also restricted the trade of machines in the tobacco industry, mineral fuels, as well as potash to producer fertilizers, wood and cement products. Furthermore, exports of iron and steel products are affected, as well as rubber products, dual-use goods and technology that could be used for military and security purposes. In total, 70% of all exports to the EU are affected by this new trade ban, with 702 individuals and 53 entities under sanctions. Due to the reputational damage of Belarus, other countries could follow soon. In addition, the trade with Ukraine – which represents 11% of all goods exports - broke down completely, also because the National Bank of Ukraine prohibited any foreign currency trade in Belarusian Ruble.

Russia, which is the most important trade partner, accounting for 45% of all Belarusian exports and 50% of all imports, will increase its support, but cannot fully balance out the sanctions from the West. Public consumption (57% of GDP) will deteriorate this year as inflation should be surging, now that energy prices have shot up due to the military conflict, and will cut the purchasing power of the people. This will hit the Belarusian population hard as the fall in the number of employees in the wake of the pandemic has not been recouped and even worsened due to political turmoil in 2021. Beside of that, private investments (22% of GDP), domestic and especially foreign investors (except Russian ones), will be scared away by the military conflict. The central bank of Belarus had raised its key interest rate by 150 basis points to 9.25% in 2021 and decided an additional rate hike of 275 basis points in late February 2022 up to 12% in reaction to the extreme devaluation of the Belarusian Ruble (20% within a few days in February against the euro and USD). Further increases of the key interest rate to stabilize the Ruble are expected in the near-term.


Public and external accounts now fully relying on Russia

Before 2019, Belarus imported Russian oil at a subsidized price, refined it and then sold it at the higher global market price. This was a main source of public funding. Since 2019, Russia has changed its customs duties and tax system for oil, so that Belarus could not profit from this Russian “tax manoeuvre” anymore. However, in 2021, Russia and Belarus negotiated to minimize this loss starting January 2022. Together with reduced COVID-19 related expenditures, this should lead to a reduction of the public deficit, but will not stop the public debt from increasing. More than 90% of this debt is denominated in foreign currency. External debt (70% of GDP) is equally divided between the State and companies, and 81% is held by Russia. The current account balance will sharply turn into a deficit as the sanctions from the West kick in on the goods trade side, but also in the balance of primary investments. 


Belarus cuts the last string to the West

The relationship between Belarus and the West was already very low at the end of 2021. President Alexander Lukaschenko was re-elected at the general election in August 2020, which was seen as unfree and the ballot was marred by massive fraud. The violent reaction of Lukashenko’s regime against the demonstrators led the EU, the U.S., the UK and Canada to impose a first round of sanctions. In May 2021, the Belarusian air traffic control ordered an Irish plane that flew from Greece to Lithuania to make an emergency landing in Belarus, to then arrest a Belarusian opposition journalist, who was on board. This led to further and stricter sanctions from the West. In retaliation, Lukashenko orchestrated a migrant crisis by luring migrants from Afghanistan, Iraq, and Syria, letting them fly into Belarus and then pushing them towards the EU borders. Latvia, Lithuania and Poland closed their borders, which left the migrants in the middle without any perspective. This again led to further sanctions. A further escalation of this situation was prevented by Russian President Putin at that moment. Due to the extremely high political dependence of Lukaschenko on Moscow, Belarus had to enter the war as a de-facto satellite country of Russia. 


Last updated: March 2022

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