Russia’s economy in decline: more than 113,000 companies have gone bankrupt since March
The economic sanctions imposed by the West on the Kremlin since March are hitting the Russian economy more difficult than before. A total of 113,000 Russian companies went bankrupt between March and June, according to a report by the FinExpertiza auditing network, Russian online magazine lenta.ru reports. Even Russian President Vladimir Putin surprisingly spoke of “big challenges” on Monday.
According to a FinExpertiza report, 113,500 companies across the country went out of business between spring and summer — a 17.5 percent increase compared to the same period last year.
Bankruptcy cannot be attributed to sanctions alone
However, FinExpertizia head Elena Trubnikova told lenta.ru that not all business closures are due to Western sanctions: “Economic sanctions and falling demand will certainly affect business demographics in 2022, but the business liquidation process generally ends.” It takes a long period of time and does not happen overnight. At present, most of the business closures are not mainly due to a decline in entrepreneurial activity, but because of the cleaning of registers by the tax authorities of shell companies and non-working companies .
According to information from the consulting network, about 16,500 companies were directly removed from business operations by their owners, and about 2,500 companies are said to have gone bankrupt.
Putin acknowledges “a huge amount of difficulties”.
But Russia’s sagging economy is also worrying for the aggressive head of the Kremlin. As Putin admitted to the Interfax news agency on Monday, his country is facing an “enormous amount of difficulties”. At the same time, he emphasized that the individual is looking for solutions for his economy. Putin said “isolating Russia from the rest of the world by a fence” is not possible in the long term.
