Russia's economy is shrinking, according to Ukraine’s Foreign Intelligence Service. Russia's small and medium-sized enterprises are on the brink of survival.
Russian oil remains a key source of revenue that funds its military aggression against Ukraine. In 2025, profits from the oil and gas sector account for about 77.7% of Russia's federal budget.
Record drop in registered companies
According to the agency, the number of registered businesses in Russia fell to its lowest level since 2010. It is just 3.17 million as of 1 September 2025. By comparison, there were 3.29 million companies in 2023.
Causes of the crisis
The main factors driving the business decline are the high interest rate of the Central Bank, which stayed at 21% annually for six months, and intensified tax control.
In 2024, the Russian tax authorities liquidated 100,000 legal entities, compared to 172,000 in 2023 and over 214,000 in 2022. Rather than revitalizing the market, this has weakened competition, reduced jobs, and decreased innovation.
Business "mortality" exceeds "birthrate"
For the first half of 2025, more companies closed than were created, a trend not seen since 2022. Trade, construction, and industrial enterprises were hardest hit. Even with a slight reduction of the key rate to 17%, the market continues to contract, leaving little chance for growth in Russia’s small and medium-sized business sector.
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