Kathrine Frich
Economic uncertainty is beginning to weigh heavily on Russia’s private sector.
As wartime pressures reshape the country’s economy, confidence among businesses appears to be rapidly deteriorating.
Confidence collapses
A growing number of Russian companies expect conditions to worsen over the coming year, according to reporting by The Moscow Times cited by United24media.
A survey by the Center for Strategic Research found that more than 83% of businesses anticipate a downturn.
Around three-quarters of respondents also said they expect their own performance to decline.
The findings point to a sharp shift in sentiment across the business community.
Mounting pressures
Companies are facing increasing financial strain, driven in part by a rise in unpaid transactions.
The survey indicated that more than 90% of firms were affected by non-payments in February.
At the same time, high interest rates are putting additional pressure on operations and planning.
Russia’s central bank rate currently stands at 15%, significantly raising borrowing costs.
Investment freeze
As a result, many businesses are scaling back or abandoning investment plans.
Nearly 42% of firms have cancelled projects altogether, while a similar share have postponed them indefinitely.
Business leaders say investment becomes unviable once rates exceed 12%, a level already surpassed.
This has led to a broader slowdown in economic activity outside state-backed sectors.
Two-speed economy
Data suggests a widening gap between industries supported by government spending and the rest of the economy.
While defense production continues to grow, most civilian sectors are struggling.
According to the report, 20 out of 24 manufacturing sectors are now in decline.
At the same time, around 75% of companies surveyed reported making no profit.
Warning signs
Experts warn that efforts to stabilise the currency are coming at the cost of private sector growth.
Industries such as coal, timber and automotive are increasingly at risk of bankruptcy.
Earlier surveys also found that nearly one-third of small business owners are considering closing or selling their companies.
Sources: The Moscow Times, Center for Strategic Research, United24Media
