Russian economy on the brink: banking crisis and companies threatened with bankruptcy!

Russian economy on the brink: banking crisis and companies threatened with bankruptcy!

Experts are warning of a dramatic economic crisis in Russia, which could lead to corporate bankruptcies and a banking crisis as early as next year. A recent analysis shows that more loans are not being repaid than officially stated, which is causing alarm among banks. In particular, the example of Sergei, a manager from Kirov, illustrates the deep financial difficulties faced by many Russians. He is struggling to raise the 1.4 million rubles (about 15,000 euros) for his wife's skin cancer treatment and has already sold an SUV to pay off debts. Despite full employment and rising real incomes, the standard of living of many citizens is falling.

The situation is complicated by the high interest rates on loans, which Uralsib Bank charges at 23 to 39 percent interest. In addition, the central bank's key interest rate remains consistently high, at 20 percent in the medium term, which puts additional strain on the economy. The central bank raised the key interest rate from 16 to 21 percent and lowered it to 20 percent in June 2025, but experts warn that this is not enough to save the solvency of companies considered “problem debtors”. According to a central bank report, the amount of corporate debt restructuring grew to 25.1 billion euros in March 2025.

Rising corporate problems

A worrying trend is the rise in corporate debt. Of Russia's 78 largest companies, 13 are experiencing debt repayment problems, an increase of seven affected companies compared to June 2024. In addition, the volume of corporate loans fell by over 16.4 billion euros in the first two months of 2025. Official figures could obscure the true extent of the debt problem, further complicating the situation.

Inflation in Russia has also reached worrying levels; in 2024 it was officially reported at 9.52 percent, while independent estimates even put it at over ten percent. Despite the difficulties, the defense industry is experiencing a certain boom phase, while other sectors are suffering from falling demand and sharply rising costs. Gazprom is in the red and numerous coal mines are on the verge of bankruptcy.

Economic perspectives and expert opinions

Opposition economist Vyacheslav Shirayev expresses concern that the Russian economy is not viable and faces a fundamental choice: end the Ukraine conflict and open up to the West or introduce a planned economy. Economic pressure is growing and the risk of a banking crisis within the next twelve months is considered realistic.

Overall, a bleak picture of the economic situation in Russia emerges. The mix of high debt, rising interest rates and inflation could have fatal consequences for the country and its citizens if measures are not taken promptly.

The development of the key interest rate of the Central Bank of Russia until 2025, documented by Statista, is an indicator of the ongoing economic challenges. The Russian economy is currently at a critical turning point.