Economic difficulties in Russia and Belarus: growth replaces decline
The economies of Russia and Belarus faced unexpected difficulties: both countries ended the first quarter of 2026 with negative economic growth. Ukraine’s Foreign Intelligence Service reported that Russia’s GDP shrank by 0.3%, and Belarus’s by 0.4%.
The main reason for this decline is considered to be the Russian Central Bank’s fight against inflation. The rise in the key interest rate has significantly increased the cost of loans for businesses, which in turn has slowed down production. Since the Belarusian economy is closely linked to the Russian one, similar problems have affected Belarus, which lacks sufficient autonomous tools to counter the crisis.
The uncertainty of Belarus’s economic future is becoming increasingly significant. The country’s ambitious five-year plan for 15% growth now seems unrealistic. Instead, the country may face stagflation: a simultaneous economic downturn and rising prices.
The continuation of the Russian-Belarusian economic crisis could lead to additional problems for Belarus. The cost of the Polish grocery basket is now only 8% higher than the Belarusian one — a significant drop from 30% compared to previous years. If this trend continues, Belarusian stores could become more expensive than Polish ones.
The end of the war does not guarantee a quick recovery for Russia due to deep structural problems. In case of stabilization, Russia may demand compensatory measures from Belarus, including increasing the share of Russian business in the Belarusian market.
The situation is complicated by the sanctions imposed by Ukraine against Alexander Lukashenko and his sons for their support of Russia in military aggression. This could increase economic pressure on Belarus in the near future.
| Country | Economic growth in Q1 2026 | Current trends |
|---|---|---|
| Russia | -0.3% | Fight against inflation, production slowdown |
| Belarus | -0.4% | Stagflation, rising prices |
