«As for inflation, we are observing a steady slowdown. In May, inflation reached 4.8% year-on-year, down from nearly 7% in December 2025. What is particularly important is that the persistent component of price growth has been declining for the fifth consecutive month, and core inflation slowed to 5.3% in May compared to 7.3% at the end of last year. Price increases were restrained by a strong Belarusian ruble and administrative regulation. An additional important disinflationary factor is the slowdown in price growth in Russia, Belarus’ key trading partner. This certainly reduces imported inflation. However, taking into account external factors, we expect inflation to reach about 5.8% by the end of the year. This is significantly below the established ceiling parameter for 2026, which is 7%. In 2027, inflation will continue to slow, and we forecast about 5% by the end of 2028,» said Anton Dolgovechny.
Against the backdrop of this inflation, the National Bank lowered the refinancing rate from 1 June 2026, to 9.25% per annum. «We expect it to remain at this level until the end of the year. We believe that room for further reduction this year is limited. We see pro-inflationary risks associated with rising prices in global markets. At the same time, the preservation of preferential lending conditions and the availability of liquidity in the banking sector ensure sufficient credit resources to support economic growth. As inflation slows in 2027-2028, we forecast further cautious cuts in the refinancing rate. At the same time, we assume that the National Bank will likely continue to regulate monetary conditions through macroprudential measures,» the analyst said.
«Speaking about the Belarusian economy, we see some signs of cooling in the first months of 2026. However, in March and April we are already observing positive dynamics. We are seeing a recovery in GDP growth, which increased by 0.2% in January-April. Against this backdrop, we forecast growth to accelerate to 1.3% by the end of 2026. In 2027, we expect growth could accelerate to 1.6%, and in 2028 to nearly 2%,» Anton Dolgovechny added.
According to the EDB’s assessment, economic growth in 2026 will be supported by sustained strong consumer activity amid rising household incomes. «Wage increases will play an important role here. Consumer activity will also be supported by further growth in the influx of tourists from Russia. In addition, we expect further growth in fixed capital investment. Important factors here are government measures to expand investment lending, as well as the start of implementation of a state program for the construction and renovation of dairy farms. The active growth of the IT sector will also play a significant role. The external environment, despite increased volatility, will also have a positive impact on Belarus’ economic growth, primarily due to rising global prices for fertilizers and agricultural products,» the analyst outlined.
