The Belarusian economy has surpassed the global average

Prime Minister of Belarus Roman Golovchenko said at a meeting of the Council of Ministers that the country’s GDP grew by 3.7% in January 2025. According to him, by the end of 2023-2024, the country’s economy is showing growth above the target parameters and global averages. Meanwhile, economists at the BEROC analytical center presented a report noting some threatening trends. The main problem, in their opinion, is too rapid wage growth, which does not correspond to labor productivity.

“For the second year in a row, the economy has shown growth above target parameters and global averages. The growth rate of gross domestic product in 2024 was 104%, with a target of 103.8%. The main drivers were industry, construction, trade and transport activities. The system decisions taken to ensure the sustainable operation of industries have allowed us to achieve a positive financial result of the economy. The net profit amounted to more than 16 billion Belarusian rubles, with an increase of 8.8% by 2023. The number of unprofitable organizations has decreased to the lowest levels in the last 10 years,” said Head of the Belarusian government Roman Golovchenko at a meeting of the Council of Ministers..

Moreover, according to him, the Belarusian economy is not slowing down and, despite sanctions and other difficulties, is showing steady growth. The Prime Minister said: “There is information about how we worked in January. The economy continues to grow. GDP grew by 3.7%. We are seeing good growth in construction, agriculture, information and communications. A fairly high consumer activity of the population remains. Retail sales increased significantly while maintaining a moderate level of inflation.”

Golovchenko confidently reports on his successes. Meanwhile, he and the government he heads are in a situation of uncertainty. Moreover, according to the Constitution, the ministers, having resigned their powers to the newly elected president, are now acting according to his will. In addition, by order of Lukashenka, an unprecedented body has been created – a Commission to develop proposals for the formation of a new government. Recently it became known that it was headed by the head of the presidential administration Dmitry Krutoy, a man who enjoys the special trust of the head of state. And, as stated on the Belarus-1 TV channel, the names are already “on the table of the head of state.”

Analyst Yuri Drakokhrust notes on one of the opposition Internet resources: “The creation of a commission to form a government rather indicates that Roman Golovchenko will not remain prime minister. Why create such a frenzy of activity just to reassign him? There is still a chance that he will retain his position. But perhaps by getting a strong figure as a deputy who will concentrate his powers. And Golovchenko will remain responsible for the possible deterioration of the economic situation.”

Independent experts warn that the deterioration of the situation in the near future is quite real. Economists from the BEROC analytical center presented a fresh monitoring of the state of the Belarusian economy. They note that although overall, by the end of 2024, its growth exceeded the planned level, however, it slowed down in the second half of the year, and in the fourth quarter the economy entered stagnation mode. It is indicated that GDP growth in October-December was minimal compared to July–September.

“There was a bump in the ceiling in the fourth quarter,” says Dmitry Kruk, an analyst at the center. Based on this, he and his colleagues expect economic growth to slow to 1.5−2% in 2025.

Independent experts point out that the main problem is the shortage of workers. And this creates a situation in which, on the one hand, enterprises are unable to increase production, and on the other, they are forced to continue raising salaries. Researchers at the BEROC center point out that as a result, adjusted for inflation, the wage level in the fourth quarter of 2024 was almost 30% higher than in 2021.

“Naturally, a rising salary is a good thing. And economists are not enemies who want to take away everyone’s wages. Economists sound the alarm when it breaks away from its fundamental parameters,” says Dmitry Kruk.

The research data shows that this is exactly what is happening in Belarus – wages are increasingly moving away from labor productivity. And it is becoming more and more difficult to raise them, especially given the price regulation applied in the country. Based on this, it is predicted that earnings growth will slow down in 2025. The result of income growth is the second problem – excessive domestic demand and consumption of goods and services. It is noted that, taking into account inflation, household spending at the end of 2024 was 23% higher than in 2021.

Another serious problem is that exports lagged significantly behind imports last year. As a result, according to experts, the negative in foreign trade reached 1.7% of GDP.

However, Roman Golovchenko himself admits this trouble. After reporting on the successes, he had to state that in 2024 the officially set task of increasing exports by 7.6% to the level of 2023 was not fulfilled. “This is the only indicator for which the target has not been reached,” Golovchenko apologized.