May 2023. Republic of Belarus: Social and Economic Developments in 2022

The negative impact of sanctions, along with high external background inflation, drove the economy of the Republic of Belarus into stagflation in 2022. Real GDP fell by 4.7%, while inflation accelerated to 12.8%. However, the macroeconomic performance in H2 is indicative of gradual adaptation of the Belarusian economy to the new environment. The GDP slump started to slow down. That was accompanied by significant deceleration of inflation, although it was partly achieved through tightened administrative price controls. Despite a decline in export volumes due to sanctions, a favourable external environment, emerging alternative markets, and expanded trade with Russia, along with restrained imports, ensured the stability of the balance of payments against the background of capital outflows. Monetary policy was aimed at stabilising inflation expectations, ensuring financial stability, and supporting the economy.

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