Russian economy on the brink: a third of companies could go bankrupt in 2025

Russia’s most powerful businesses have found themselves in a zone of serious financial risks — state reserves and their support instruments are almost exhausted.

This is reported by The Moscow Times, citing statements from the Ministry of Economic Development of the Russian Federation.

Minister Maksym Reshetnikov noted at the plenary session that several companies may already face collapse due to deteriorating financial conditions. “We need to create effective debt restructuring mechanisms,” he said.

The main reason is the rapid rise in interest rates, which makes it increasingly difficult for businesses to service their external and internal obligations. Previously, Russian companies borrowed abroad at favorable rates, but later transferred their debts to rubles. Later, the ruble appreciated due to the Central Bank raising the key rate to record levels.

According to experts, companies that provide 24% of the total revenue of the Russian economy are currently at risk of bankruptcy. Next year, it is predicted that this share could grow to 32.5%, exceeding the figures even during the COVID crisis.

On average, Russian businesses pay 36% of their profits on interest on debt, while profits themselves are shrinking and profitability is approaching its lowest levels in the last decade.

Since the beginning of the war, Russian banks have provided loans to legal entities totaling 34 trillion rubles — about 17% of Russia’s GDP.

As of early June, the debt burden of legal entities exceeded 86.2 trillion rubles, which is 65% more than at the beginning of 2022.

Such conditions are increasingly leading to companies failing to meet their financial obligations on time, a serious concern among bankers, some of whom are already preparing scenarios for a full-blown banking crisis within the next 12 months.

Recall that the crisis in the freight transportation industry is deepening in Russia – companies are facing rising costs, falling demand, and leasing problems . According to analysts, up to 15% of carriers may leave the market by the end of 2025.

As reported, Russia’s largest automaker AvtoVAZ switched its factories to a four-day work week starting September 29. The new schedule will be in effect for at least six months, until March 2026. The reason was a sharp drop in sales and problems in the car market.

By the way, Ukraine’s allies are preparing a new stage of economic pressure on Moscow – the so-called “smart” sanctions, which are supposed to hit Russian finances simultaneously with Ukrainian attacks on facilities inside Russia . The West is considering the possibility of using the Kremlin’s frozen assets and introducing new financing mechanisms for Kyiv.

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