Uncertain Future: Russian Businesses Brace for Economic Slowdown

A majority of Russian businesses foresee an impending economic slowdown and the challenges posed by high interest rates and inflation. Despite past growth, businesses struggle with credit and disruptions in partnerships. The central bank's interventions show mixed results with the next rate meeting on September 12.

A recent survey by the RBK media group highlights the growing concerns among Russian businesses regarding the country's economic outlook. With 57% anticipating a slowdown and only 28% hoping for recovery, the sentiment reflects the ongoing challenges faced by the economy.

The last few years have seen Russia's economy growing at 4.1% in 2023 and slightly more in 2024. However, this growth has been tempered by high interest rates, attributed to increased military expenditures and rising inflation, leading the central bank to set interest rates as high as 21%.

Efforts by the central bank to mitigate the situation included reducing the key interest rate to 20% in June and further to 18% in July. Yet, officials continue to voice apprehensions about the enduring impact of tight credit conditions. The upcoming rate setting meeting in September remains pivotal for the nation's economic strategy.

(With inputs from agencies.)