Belarus Maintains High Economic Growth
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Loading... - Debora Costa
- 17 Mar 2025
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Belarus continues to demonstrate robust economic growth, as highlighted in the latest macroeconomic review by the Eurasian Development Bank (EDB). The country’s economy expanded by 4% in 2024, following a 3.9% increase in 2023, driven primarily by strong performance in industry, construction, and trade.
The EDB attributes the high growth rates to several factors, with domestic demand emerging as the primary driver of economic activity. The industrial sector was particularly noteworthy, showing a 5.4% increase and contributing approximately 1.4% to GDP growth. This surge in industrial output is largely fueled by high demand from Russia, which has become a significant market for Belarusian goods.
Trade and construction also played vital roles in the economic expansion, contributing about 0.8% and 0.5% to GDP growth, respectively. Additionally, the information and communication technology (ICT) sector saw a revival, with value added in this area increasing by 1.8%.
Consumer demand has strengthened significantly in 2024, bolstered by rising real incomes and wages. The growth in retail trade reached 11.8%, driven primarily by non-food items, which saw an impressive 17.6% increase. Public catering turnover rose by 10.6%, and paid services increased by 10%, reflecting higher levels of consumer prosperity.
Investment activity also continued to expand, with capital investment growing by 8% in 2024. Government measures, such as reduced taxes on imported equipment and improvements to investment legislation, facilitated this growth. Enterprises actively invested their own funds and sought loans to expand production capabilities.
Real wages in Belarus rose by 13% in 2024, following an 11.6% increase in the previous year. The unemployment rate fell to a historic low of 3%, down by 0.5%. Meanwhile, inflation slowed to 5.2% in December 2024, down from 5.8% in December 2023, aligning with the National Bank's target of no higher than 6%. The EDB noted that moderate price growth during this period has led to decreased inflation expectations, contributing to a favorable economic outlook.
As of January 2025, Belarus's GDP grew by 3.7%, primarily driven by sectors focused on consumer demand and construction. Retail trade surged by 12.2%, and the volume of contracting works increased by 10.3%. Wages continued to rise, with a 13.5% increase in January, supported by higher base rates of labor remuneration and expanded allowances for certain budgetary employees.
Belarus's gold and foreign exchange reserves reached a five-year high, totaling $8.9 billion at the beginning of 2025, following an increase of $795.1 million in 2024. The appreciation of gold, which rose by 25.5% last year, was a significant factor in this growth. In January 2025, reserves increased by an additional $410.6 million, reaching $9.3 billion.
Despite global challenges, Belarus's economy is showing strong growth, supported by domestic demand, investment activity, and the development of key industries. The EDB's review indicates that the overall GDP of its member countries grew by 4.3% in 2024, maintaining a record-high level. As Belarus continues to build on its economic momentum, the focus on sustainable growth and investment will be crucial for its future development.
