Business activity in Russia drops to a two-year low as sales decline

In February, the Russian Small Business Index (RSBI) measuring the activity of small and medium-sized companies in Russia fell to 51.7 points, the lowest level since early 2023.

Source: The Moscow Times

Details: Businesses have been particularly affected by declining sales, with the corresponding index dropping to 44 points, a two-year low. Nearly half (47%) of companies reported a decrease in revenue, compared to 38% in January.

Small businesses and trading companies have been hit the hardest, with more than 50% of respondents reporting falling income.

Banks have also become less willing to provide loans to entrepreneurs. The demand for financing among small businesses has dropped to a record-low 27%, while only 20% of applicants receive loan approvals. The Russian Central Bank attributes this to high interest rates and a reduction in preferential lending.

Background:

• The Russian airline Kosmos, owned by the Russian Defence Ministry, has suspended its operator certificate and may face bankruptcy.
• Since the beginning of the year, road freight transportation volumes in Russia have decreased by one-third.

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