One in three Russian companies say their business conditions have worsened over the past six months, a new survey said, marking the highest level of pessimism since Russia’s full-scale invasion of Ukraine in 2022.

Thirty-four percent of firms surveyed by consulting firm Yakov & Partners’ CEO Barometer reported a deterioration in their situation up from just 16% in May 2024 and 24% in December 2022.

The report, obtained by Forbes Russia, was prepared for last week’s St. Petersburg International Economic Forum.

Industries reporting the sharpest downturns include mining, heavy industry, chemical manufacturing, the oil and gas sector, energy and transportation.

Twenty-five percent of companies said they had paused or slowed investment projects, while 13% suspended all projects deemed nonessential.

Rising borrowing costs driven by the Central Bank’s high key interest rate were cited as a major obstacle by 42% of respondents, up from 38% the previous year.

“The cost of capital has become a central concern,” the report said, noting that tighter financial conditions are putting long-term investment strategies at risk across multiple sectors.