Russia’s High Rates Pose Bigger Threat to Companies Than Past Crises, Think Tank Warns
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Russia’s High Rates Pose Bigger Threat to Companies Than Past Crises, Think Tank Warns
Kremlin-linked think tank warns that a growing share of companies face financial distress. The longer the economy operates under tight monetary conditions, the greater the risks to production and corporate balance sheets. Real interest rates hit their highest level in more than 25 years in late 2024 and continued to climb.
The Center for Macroeconomic Analysis and Short-Term Forecasting (CMASF) said the longer the economy operates under tight monetary conditions, the greater the risks to production and corporate balance sheets.
Its bankruptcy model shows that companies accounting for nearly a quarter of revenue (23.7%) are already in a “financially vulnerable” position this year, a share that could rise to almost a third (32.5%) in 2026.
Real interest rates hit their highest level in more than 25 years in late 2024 and continued to climb, CMASF noted.
Even after the Central Bank cut rates in July and September, Russia’s real policy rate is second only to Brazil’s among major economies. When adjusted for inflation trends, Russia surpasses Brazil.
The pressure has already pushed civilian manufacturing output lower since early 2025, the think tank said.
The decline is weaker than the slump that followed war-related Western sanctions in 2022 but significantly worse than during the Covid-19 crisis in 2020.