Russia's Economy Is Dragging Lukashenko To The Bottom

• 15.05.2026, 7:35

How can this end?

Russia's economy shrank by 0.3% at the end of the first quarter of 2026, while Belarus - by 0.4%. Both countries went into the year with optimistic growth forecasts, but the result was the opposite.

The Foreign Intelligence Service of Ukraine reports that.

Why economies are falling

The key reason is the Russian Central Bank's fight against inflation. Raising the discount rate has sharply increased the cost of credit for business and industry, which has slowed production.

Because Belarus is firmly tied to the Russian market, it is experiencing the crisis along with its neighbor - and without its own tools to get out of it.

Stagflation instead of growth

The ambitious Belarusian five-year growth plan of 15% now looks like a sham. Instead, the country is facing stagflation: the economy is falling, while prices are rising.

Last year, the Polish food basket cost only 8% more than the Belarusian one - while a few years ago the gap reached 30%. If the trend continues, Belarusian stores may become more expensive than Polish ones.

What will happen after the war

Even the end of the war will not give Russia a quick recovery - the structural problems are too deep. For Belarus, the consequences may be even more painful: while Russia supports the Belarusian economy during the war, after the war it will seek compensation - primarily human capital and a share of the Belarusian market, displacing local businesses in favor of Russian ones.

Earlier this year, intelligence released a new intercept that showed the critical state of Russia's regional budgets.

At the same time, data has emerged in recent days that confidence in Vladimir Putin among Russians has fallen to its lowest level since the beginning of the half century Even official polls testify to this.