The government is priming the economy with significant injections of funds ahead of the upcoming elections

The government is spurring economic growth by making substantial investments in the public sector. The National Bank is propping up domestic demand through increased lending in response to declining export revenues due to Western sanctions. The ruling elite aims to maintain a significant share of state-owned companies in the economy while reducing the proportion of small businesses.

In August, the broad money supply surged by BYN 3 billion and 62.7 million, reaching an all-time high. The National Bank has significantly ramped up lending demand by slashing the refinancing rate. The regulator has cut the interest rate six times in 2023, bringing it down to 9.5%. Belstat has reported deflation in certain product categories.

Independent economists are pointing out growing economic imbalances that could accelerate inflationary pressures, despite strict price controls remaining in place. Officials are continuing to fine-tune administrative price regulation mechanisms.

Belstat observed a drop in food prices in August, although prices for some seasonal food items rose. Shoppers are encountering a reduced variety of products, including poultry.

The total debt of Belarusian citizens for bank loans has been on the rise for fourteen consecutive months, reaching a record of BYN 18 billion and 538.7 million at the start of August.

The ruling elite is retaining the loyalty of public sector employees by boosting wages, partly as a result of streamlining the workforce through repressive measures and labor migration.

The income of the population continued to grow, reaching 104.5% of the January-July 2022 level.

There is a growing shortage of workers at large state-owned enterprises.

The Belarusian leadership is maintaining unfavorable conditions for small businesses, which it considers a politically disloyal group. The number of entrepreneurs has dropped by almost 17,300 people across the country in the past two years. In Minsk, an unofficial ban on registering individual entrepreneurs has been in effect for two years, citing “technical reasons.”

Inspectors and tax collectors are still contributing substantial fines to the government’s budget.

An importer of medical masks was fined BYN 250,000 for exceeding the wholesale allowance. The owner of a large real estate rental business paid BYN 1 million in taxes after a State Control inspection.

Hence, the ruling elite is determined to maintain the popularity of state institutions by increasing the income of the population while concurrently imposing restrictions and repression on opponents.