Russia’s Economy: A Deepening Crisis and Its Impact on Daily Life
Russia’s economy is once again teetering on the brink of a severe crisis, as confirmed by official statistics and recent reports from leading companies across the country.
Despite Kremlin’s efforts to deny and conceal the actual state of affairs, the real indicators tell a much graver story.
Over the past month, key industrial sectors have experienced significant losses and deteriorating financial results.
For example, automobile manufacturing profits have fallen by 37%, while losses have surged by over 120%, indicating an alarming decline in one of the country’s vital industries.
The extraction of minerals has also suffered, with coal profits dropping by more than half, and losses rising 1.6 times, demonstrating the economic fragility.
The oil and natural gas sectors are equally affected: profits declined by 30%, but costs increased by an astonishing 1300%, reflecting a dire situation in resource export industries.
Overall, this points to a deepening economic downturn in Russia.
The situation is equally troubling in the pulp and paper industry, where profits decreased by 42%, while losses grew nearly fourfold.
The forestry sector hasn’t escaped unscathed either — profits dropped 25%, and losses doubled.
Logistics and transportation infrastructure are also under severe strain, with railway freight profits down by 57%, and losses skyrocketing nearly sevenfold.
These trends highlight a rapid decline in business viability and financial stability.
The automotive giant «AvtoVaz» recently acknowledged that its products are no longer in demand, reducing its production plans by 40% after returning from a two-month shutdown, and continuing the four-day workweek until at least March 2026.
This signals a broader industrial crisis, with many key enterprises on the brink of closure.
Major factories and companies are experiencing layoffs and insolvency; for instance, the Tumen plywood plant «Svezda» has laid off 300 employees and faces potential closure, while the leading developer «Samolet» has cut 30% of its staff.
The high-tech sector also faces serious challenges: «PK Aquarius», a major server producer, is nearing bankruptcy, and the state design institute for machinery «Roskosmos» is preparing for court proceedings on insolvency.
Financial stability is further compromised as the Central Bank revoked the license of Tavriy Bank, an important financial institution.
Retail chains such as «Army of Russia» are poised to shut down soon, and clothing retailer «Gloria Jeans» plans to close its flagship store in Moscow.
All these developments threaten to further destabilize Russia’s economy, prompting urgent attention from both government authorities and international observers to assess and anticipate future consequences.