The Belarusian economy remains mostly state-controlled, as it has been since Soviet times. Over half of the business are state controlled and foreign ownership is under 4 percent.[27] The country is relatively stable, economically, but depends to a large extent on raw material supplies, such as oil, from its close ally Russia.

Industry and agriculture remain largely in state hands. Belarus is therefore one of the very few state-capitalistic national economies remaining. Agriculture is dominated by collective farming, with the major sub-sectors the cultivation of potatoes and cattle breeding. Historically important branches of industry include textiles and wood processing.

After 1965, creation of heavy industry and mechanical engineering (tractors, refrigerators) significantly strengthened the country's development. Within the Soviet Union, Belarus was one of the most industrially developed republics. Economically, Belarus engages itself in the Commonwealth of Independent States, Eurasian Economic Community and Union with Russia.

After 1990, with the introduction of free market structures into the former Soviet Union, industrial production plunged. Gross domestic product (GDP) for 2005 was $79.13 billion (estimate), which equates to an annual income of approximately $7,700 dollar per head.

In 2005 GDP increased by about 8-9%, with the inflation rate averaging about 8%. According to the UN, average monthly income grew from 20 United States dollars to 225 USD during the last 10 years.

The Belarusian economy is impacted by the political situations inside the republic. The impact is mostly felt in the form of sanctions against the country or the leadership of Belarus. For example, the European Union adopted Council Regulation (EC) No 765/2006 on 18 May 2006. The Regulation provided for a freeze on the funds of President Lukashenko and between 30 to 35 high-level officials of Belarus. The sanctions also provided for travel bans for the aforementioned leaders. The sanction was imposed by the EU after the nation-block declared that the 19 March 2006 elections were fraudulent and for the crackdown on opposition groups.