Belarus covers budget shortfalls with Russian funds – intelligence

That is according to Ukraine's Foreign Intelligence Service, Ukrinform reports.

According to analysts from the MacroBy initiative, Belarus's consolidated budget expenditures exceeded 30% of GDP for the first time since 2010, while the economy grew by only 1.3% – a result that in no way justifies such large-scale fiscal injections.

Tax revenues, which account for more than 80% of budget income, slightly declined – from nearly 25% of GDP in 2023-2024 to 24% in 2025 – due to reduced proceeds from foreign economic activity.

The shortfall was partially covered by non-tax revenues, primarily transfers from Russia, including compensation under the reverse excise scheme for Belarusian oil refineries. Their share reached 1.8% of GDP – a level last seen in 2018, when the "re-customs clearance" scheme for Russian oil was in effect.

Thus, Belarus's dependence on Russian transfers increased in 2025, the intelligence service said.

The main driver of expenditures was public sector wages, which rose by 18% in nominal terms and may have reached 10% of GDP – about one-third of total consolidated budget spending.

To cover the gap that could not be filled by taxes, the central bank purchased government bonds worth 2.3 billion rubles (about 0.8% of GDP), effectively engaging in monetary financing of the deficit.

"The situation will worsen. In 2026, analysts expect the deficit to grow to 1-1.5% of GDP: revenues will slow due to economic cooling, while expenditures will remain high. A certain buffer exists, but significantly increasing spending will no longer be possible," the Foreign Intelligence Service said.