Belarus Economy

Belarus Economy


  • Basic data
  • Public finances and the state budget
  • Banking system
  • Tax system

Basic data

Over the last 10 years (2010 – 2020), the government’s economic growth forecast was realized only once – in 2017. At that time, the gross domestic product (GDP) rose by +2.4%, instead of the predicted +1.7%. However, this happened after more than two years of decline in the Belarusian economy (-3.8% in 2015; -2.5% in 2016). The preparation of the official growth forecast for 2020 was based on the so-called basic scenario, which did not include significant economic shocks. Thus, the Belarusian government had much better expectations than it turned out to be. Even before the outbreak of the coronavirus epidemic in the first quarter, Belarusian oil refineries had to work under conditions of limited supply of raw materials from Russia. Insufficient utilization of refineries significantly complicated the work of the petrochemical and transport sectors. In the second quarter, the performance parameters of the Belarusian economy deteriorated due to the spread of the coronavirus and lower demand for Belarusian goods on world markets. In the third and fourth quarters, the negative expectations of business entities and the population grew with regard to the intensified internal political situation after the presidential elections. The crisis significantly affected the economy through inflationary expectations, currency devaluation and a drop in domestic demand. Check ebizdir for economical facts of Belarus.

As a result, the country’s GDP for 2020 decreased by -0.9% and amounted to USD 60.4 billion in current prices. Although the fall in GDP is smaller than the original estimates (-6%) of IMF analysts from the spring after the big shock, when the outlook was very uncertain and pessimistic. Even the IMF and EBRD forecasts from October 2020, with an expected decline in economic performance of 3%, did not come true. However, the decline occurred against the background of a low comparative base (GDP growth +1.0% in 2019). A directive management model with planned production has allowed state-owned enterprises, which make up more than 70% of the Belarusian economy, to more or less maintain their production volume. However, instead of being exported, production went to storage (stocks of companies approx. USD 2 billion). At the end of the year, a number of export-oriented enterprises recorded a decrease in profitability, the number of loss-making enterprises increased. All this points to a significant weakening of the Belarusian economy.

The development of gross added value in transport (-8.5%), energy (-3.8%), mining industry (-2.2%) and trade (-1.4%) contributed the most to the decrease in GDP. The volume of industrial production of Belarusian enterprises showed a -0.7% decrease to BYN 11billion. The rapid deterioration of the Belarusian economy is successfully prevented by achievements in agriculture and in the information and communication field. Agricultural production gained +5.3% (BYN 2billion), information and communication activities – an increase of +7.0%.

Potassium fertilizers, mineral oils and iron or steel products, non-alloy steel wires, pine and fir wood, tires and agricultural machinery (trucks, tractors) and from the food industry mainly cheese, butter and meat products. Among the import items, the import of cars, machines and equipment used in the energy industry, telephone sets and portable devices for automated data processing is significant.

Pointer 2018 2019 2020 2021 2022
GDP growth (%) 3.0 1.2 -0.9 0.7 1.8
GDP/population (USD/PPP) 19,364.6 20,031.9 19,660.0 20 120.0 20,880.0
Inflation (%) 5.6 4.7 7.4 6.5 6.0
Unemployment (%) 4.8 4.7 5.3 ON ON
Export of goods and services (billion USD) 42.0 42.0 37.0 ON ON
Imports of goods and services (billion USD) 41.3 42.2 35.2 ON ON
Trade Balance (Billion USD) 0.7 -0.2 1.8 ON ON
Competitiveness ON ON ON ON ON
Population (millions) 9.5 9.5 9.4 9.4 9.4
Industrial production (% change) 5.7 1.0 -0.7 ON ON
OECD export risk 6 6 6 6 ON

Source: EIU, OECD, WEF, Belstat

Public finance and state budget

Public finance
State budget balance (% of GDP) -5.4
Public debt (% of GDP) 52.8
Current account balance (billion USD) -1.0
F.O 13 %
VAT 20%

The increase in credit risks in the banking sector, associated with the deterioration of the borrowers’ financial condition and the high specific weight of foreign currency loans, currently represents the biggest threat to the country’s financial stability. For the time being, the government has the option of leveling the mentioned challenges, but only at the cost of increasing problems with the implementation of the budget (the decline in economic activity in 2020 led to a decrease in revenues to the state budget; the budget deficit in 2020 is 1.5% of GDP). A necessary requirement for solving the problem of bad debts in the banking system is to increase the efficiency of business in the state sector. There is still a lack of political agreement on this issue, and instead of adopting strategic solutions, the Belarusian government continues to subsidize state-owned loss-making enterprises at the expense of the private sector. In addition, the Belarusian government, even this year with a deficit budget of min. 2% of GDP with a relatively high level of social spending. This is also a directive increase in the level of the population’s income without a corresponding increase in labor productivity, which only strengthens internal risks, the most significant of which is the acceleration of the rate of inflation.

The national debt of Belarus rose by 29% year-on-year to 57.8 billion BYN (in January: 4billion BYN), i.e. 52.8% of GDP. Of this, the state foreign debt of Belarus rose by USD billion to USD 18.6 billion; public debt of Belarus rose by 12.9% to BYN 9.9 billion (in January: BYN 8.7 billion). The volume of foreign exchange reserves at the end of 2020 was USD 7,469 billion (the government expected the volume of foreign exchange reserves to be at least USD 7.3 billion at the end of 2020). Debt service – The Belarusian state (according to the Ministry of Finance of Belarus) borrowed USD 3,147 million on foreign markets in the period January – December 2020 (including the placement of Eurobonds in the total amount of USD 1,39million; a loan from the Government of the Russian Federation and banks of the RF in the amount USD 1,05million; Eurasian Stabilization and Development Fund loaned USD 500 million; China Export-Import Bank provided USD 12million; USD 67.1 million USD lent by the International Bank for Reconstruction and Development; 11.0 million USD was lent by the European Bank for Reconstruction and Development and the Northern Investment Bank) and paid off 1,635 million USD of debts.

Banking system

The so-called two-tier banking system operates in Belarus. The first level is represented by the National Bank of Belarus ( as the issuing center and the main regulator of the banking sector. It is subordinate to the President of Belarus in accordance with the Constitution of the country. The basic tasks include protecting and ensuring the stability of the Belarusian ruble, developing the country’s banking system and ensuring the efficient and secure functioning of the payment system. The second level is represented by credit organizations, i.e. commercial banks and non-bank credit organizations. Currently, 24 banks are registered in Belarus. An overview of them, including information on the capital, loan portfolio, shareholders and results of operations is available on the website of the National Bank of Belarus

Among the most important in the country are: ABSOLUTBANK (, ALFA-BANK (, BSB BANK (, BTA BANK (, VTB BANK (, BELGAZPROM BANK (, BELARUS BANK ( Representation of foreign banks: Сommerzbank АG (Germany), Межгосударственный банк, ЗАО ЮниКредит Банк (RF), ОАО Российский Селышающий банк (RF), China Development Bank (PRC).

The macroeconomic results that Belarus managed to achieve last year in the conditions of the pandemic crisis (or, as far as possible, to slow down its negative consequences) were made possible, among other things, thanks to the policy of the state banks, which partially took over the country’s problems and supported industry, agriculture, construction and other fields. However, the credit indebtedness of the economy increased significantly as a result, and the volume of problem loans in the banks’ assets also began to increase.

Tax system

The basic document that regulates the tax system of Belarus is the Tax Code, which is divided into two parts. The general part describes basic provisions and concepts, the special part clearly regulates individual taxes, fees, defines taxpayers, the subject of taxation and the procedure for their calculation. The current tax system of Belarus is stable (it consists of republican, local and other taxes).

VAT (0% /export/, 0.5%, 9.09% or 16.67%, 10% /food/, 20% /goods, work and services/); consumption tax (in absolute value or % for 13 categories of goods); profit tax (18% – from income from the realization of goods, services and works, property rights, 12% – from dividends); income tax of foreign organizations that do not operate in Belarus through permanent representation (5,6,10,12 or 15%); personal income tax (12% – basic tax); real estate tax (1%, in the case of undelivered real estate beyond the allowed period, 2%).

The legislation allows for special taxation regimes – for example, a simplified levy system for self-employed persons and small businesses with up to 100 employees; taxation of residents of special economic zones and technological parks; business activity in small towns; a single tax on self-employed persons and natural persons, a fee for craft activities, a fee for services in the field of agritourism.

Belarus Economy