Express Analysis. September 2022

Decline in the Belarusian economy slowed down in August, while elevated inflationary pressures persisted

Belarus' GDP has fallen by 4.9% (y/y) over eight months. In particular, the GDP decline rate slowed to 3% (y/y) in August, while it was over 10% (y/y) in July. Decreasing scale of the decline is mainly explained by the picking up pace of the harvesting campaign with increased grain yields: agricultural value added rose by about 26% (y/y) in August, thus offsetting a nearly 20% (y/y) slump in July (Figure 1.a). If we abstract from the harvest bias factor by applying the July-August weighted average growth rate of the agricultural value added to the calculation of GDP, then the estimated GDP decline was approximately 7.6% (y/y) in July and 5.7% (y/y) in August. In general, such dynamics indicate gradual adaptation of the Belarusian economy to operating under severe sanctions.