There are clear signs that Russian economy is headed toward a collapse. Resources are being used to the maximum. This means they will be increasingly expensive for enterprises, and not everyone will be able to afford them. Prices are increasing, and the Russian Central Bank cannot stop them. Last week, according to Rosstat, inflation rose again: up to 0.37% (a week earlier, it was 0.30%). To slow down price growth, it is necessary either to stop economic growth and budget expenditures (infusions in the military-industrial complex, etc.) or put up with inflation rates above the target, the Russian Academy of Sciences said.
Only certain industries are growing in Russia, primarily machinery. In other words, what the budget pays huge amounts of money for and what goes to be destroyed in Ukraine is on the rise. This means that the money poured into industry does not bring anything to the economy except for the figures that are pleasant to the ear of the authorities. But even this growth has already been exhausted, as next year, GDP will increase by only 0.5-1%, and the growth rates of investments and private consumption may go to zero.
The International Monetary Fund predicts that the Russian economy will slow down threefold, from 3.9% growth this year to 1.3% next year. This is three and a half times less than in developed countries and 5-6 times less than in China or India.
A total of 4,363 legal Russian entities were declared bankrupt in the first six months of 2024, which is 40% more than in the same period a year earlier. And this is with the declared economic growth of 4%. What will happen at the economic growth of 0.5%, as predicted by the Central Bank? Mass bankruptcies and the economy of the early 90s - lots of tanks, nothing to eat?
In 2025, Russians will face a new series of losses and bankruptcies. The reason is not only sanctions restrictions but also growing problems inside Russia.
Rusal, one of the world's largest aluminum producers, announced the start of production optimization - it will be reduced by 250 thousand tons in the first stage. The company explained the decision of optimization by "record prices for raw materials and high risks of a continued negative macroeconomic environment."
Major Russian mining and metals company Mechel announced the suspension of one of its enterprises - Olzherasskaya-Novaya mine in Mezhdurechensk. The reason is problems with the sales market.
Major Russian corporation PJSC Gazprom made a record net loss of $6.1 billion in 2023, becoming Russia's most unprofitable company for the first time in 25 years.
ALROSA (Russian group of diamond mining companies) reduced its revenue under Russian Accounting Standards (RAS) by 30% and net profit by 3 times in 9 months. The net loss amounted to 6.5 billion rubles ($62,7 million).
Baltika brewing company is among the top ten most unprofitable companies in Russia in 2024. In 2022, the company's revenue was about 100 billion rubles ($965 million). In 2023, the net loss was 28.1 billion rubles ($271,1 million). The option of filling the budget by nationalizing profitable private enterprises has failed.
PJSC KAMAZ's net loss for the first nine months of 2024 amounted to 3.8 billion rubles ($36,6 million) against a profit of 15.8 billion rubles ($152,4 million) for the same period last year, according to financial statements published on the company's website.
AvtoVAZ automobile manufacturing company is talking about possible bankruptcy and debts of over 100 billion rubles ($965 million). This is due to the increase of the Russian key rate.
Rosneft CEO Igor Sechin is going to classify data on Russian oil exports and the production volumes of Russian refineries ostensibly to protect Russia's national interests from "unfriendly actions" by the USA and other Western countries. In reality, it is to hide the crisis in this field.
Sanctions were imposed on Gazprombank, the major bank, and fifty other banks. Sanctions were also imposed against the Russian System for Transfer of Financial Messages (SPFS, sort of Russian analog of the international SWIFT messaging system).