Kathrine Frich
Russia’s economic strain is becoming harder to ignore as pressure from sanctions and high interest rates spreads across key sectors.
New reports point to growing trouble in construction, an industry once supported by state spending and cheap credit.
The latest bankruptcies add to signs that the wider economy is losing momentum.
Mounting pressures
Western sanctions continue to weigh heavily on Russia’s finances. This week, official figures showed oil and gas revenues, a cornerstone of the state budget, fell by around a fifth in 2025.
Other sectors have already been hit hard. Housing developers and coal producers have struggled as borrowing costs surged following strict monetary policies by the central bank.
Construction is now joining that list.
Firms collapsing
According to Russian newspaper Izvestia, several major construction companies have either entered bankruptcy or are on the brink of collapse, with combined debts nearing £900,000 (about $1.1 million).
SC Donstroy, based in Rostov-on-Don, was declared bankrupt after running up debts of 11 million rubles, around £105,000 ($133,000).
Another firm, LLC “STEK”, collapsed last year owing roughly 39 million rubles, or £373,000 ($470,000).
Debts pile up
Further failures appear imminent. Izvestia reported that Stroyproekt Group was close to bankruptcy, while Regionstroy has already fallen, burdened with debts of about 43 million rubles, equivalent to roughly £402,000 ($507,000).
These figures highlight how rising costs and tighter credit are pushing companies beyond their limits, even in regions far from the front line.
Grim outlook
Ukraine’s foreign intelligence service said this week that Russia’s economy is caught between recession and accelerating inflation.
“Strict monetary policies by Russia’s central bank have effectively stifled business activity and intensified stagnation, which has now taken on a systemic character,” the agency said.
It added that pressure is also growing on the budget side, with tax changes reducing incentives for business while high wartime spending continues despite falling revenues, widening the deficit.
Sources: Izvestia, Ukrainian foreign intelligence service, Express.
