Belarus Edges Toward Default as Putin Closes Wallet and Economy Hits the Wall — Ukrainian Intelligence

Belarus is approaching the brink of default amid growing economic challenges and diminishing financial support from Russia, according to a report by the Foreign Intelligence Service of Ukraine.

Economic growth in Belarus slowed sharply in the first half of 2025, with GDP increasing by just 2.1%—down nearly three percentage points compared to the same period in 2024.

Inflation reached 7.3%, while concerns over a potential devaluation of the Belarusian ruble continue to mount.

The downturn has been driven in part by a sharp contraction in the agricultural sector, which declined by 8.1% year-over-year. In addition, exports to Russia—Belarus’s primary trading partner—have significantly decreased. Shipments of consumer goods, equipment, and lumber fell by over 70% in the first six months of 2025.

Between January and April, Belarus recorded a trade deficit of $856 million. While exports dropped slightly by 0.3%, imports rose by 4.7%. Industrial output showed minimal growth of 0.3%, largely due to limited domestic demand.

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The economic slowdown in Russia is compounding Belarus’s difficulties. Russia’s GDP contracted by 4% in the first quarter of 2025, reducing its capacity to provide financial assistance, invest in regional partners, or absorb Belarusian goods.

Without external backing, Minsk faces increasing pressure on its economy. A further decline in the Belarusian ruble could erode household purchasing power and increase the risk of domestic instability.

The Ukrainian intelligence assessment notes that Belarus is likely to maintain weak growth throughout 2025. However, a more severe economic downturn is expected in 2026–2027, driven by falling household incomes and prolonged exposure to Russia’s stagnating economy.

Earlier, Belarus confirmed its participation in the joint development of Russia’s Su-75 “Checkmate” fighter jet—a fifth-generation stealth aircraft positioned as a low-cost rival to the F-35. The project, led by Russia’s United Aircraft Corporation, is being developed in partnership with Belarusian defense authorities, according to Dmitry Pantus, head of Belarus’s State Authority for Military Industry.

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