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The inflation is more than double the numbers in Western countries – and that’s just one of the troubling trends.
Russia’s financial system is coming under intensifying pressure, with business leaders warning that mounting debts and stubbornly high borrowing costs are creating a dangerous squeeze on companies.
Recent data reported by the Express paints a stark picture of a corporate sector struggling to keep pace with its financial obligations.
Rising pressures
Over the past year, the Central Bank of Russia implemented steep interest-rate hikes to combat accelerating inflation, pushing the key rate up to 21% before easing it to 16.5% in November.
According to the Express, the earlier surge in borrowing costs left many firms unable to service their loans as revenues weakened across multiple industries.
Analysts cited by the outlet say inflation is expected to climb again in 2025, a trend that could force policymakers to tighten monetary policy further.
Business groups argue that any new increases would only deepen an already fragile situation.
The Express, referencing Central Bank figures, noted that troubled loans have reached 10.4 trillion rubles ($131.7 billion), a volume equivalent to nearly a quarter of the federal budget.
Inflation drops, but still through the roof
According to the Central Bank of Russia, the annual inflation in October was 7.7%
That’s a drop from the 8% in September, but still very high compared to Western countries.
For comparison:
- the US inflation in September was 3%
- the UK inflation in October was 3.6%
- the inflation in the EU was 2.1% in October.
1 in 4 Russians’ wealth deteriorates
A new sociological survey from the Center for Countering Disinformation of the National Security and Defense Council of Ukraine shows that 23% of Russian citizens report a deterioration in their wealth.
Only 8% report an increase.
Additionally, only 24% hope for an improvement in the coming year, highlighting how the average Russian views the country’s future.
Recession before New Year?
In order to keep money flowing into the war chest, Russian authorities have increased taxes and fees, adding further strain to an already struggling population, PBS reported last week.
But the rise in taxes and fees may not be enough to stave off a looming downturn.
On Nov. 7, The Moscow Times reported that the Central Bank of Russia warned of a possible recession in the Russian economy.
After just 0.6% GDP growth from July to September, the economy is approaching the point where a recession could hit before 2025 turns to 2026.
Sources: Express, The Moscow Times, UNN, European Commission, Trading Economics
