Three and a half years after the start of the war in Ukraine in Russian trade unusual phenomena appear. The most spectacular of them has late been reported by the paper “Izwiestia”. According to online sales data, more and more Russians are treating their teeth and replenishing their losses. On 1 of the trading platforms, the number of announcements on self-treatment kits has increased more than 3 times over the last 12 months.
One of the sellers sold 44,000 pieces in a year, or 118 a day. The price of 1 set is about 10 euros (42.7 zł). There are instructions on self-treatment on social media. The paper explains this trend Increase in the cost of visiting dentists, which only increased by 18–20% in 2024. In June, the visit cost an average of 120 EUR (512 PLN) – about 15 percent more than the year before.
Finally feel the effects inflation caused by advanced war spending and the reaction of monetary policy to this situation. Although advanced interest rates appear to have slowed inflation for the first time (for a long time they amounted to 21%, from 25 July to 18%), the Russian central bank has slowed down inflation for the first time, an highly restrictive monetary policy has led to payment difficulties which are becoming increasingly apparent.
This applies, for example, to wages. While in fresh years – especially in the military sector and its related industries – wages have increased rapidly due to labour shortages, the company's backlog in paying wages is now increasing.
Although the authoritative amount of debt at the end of May was not besides advanced — it was 1.7 billion rubles (about PLN 79 million) — but according to statistic from the end of June, compared to April, it increased by 12.2%. Companies deficiency own resources. The Ministry of Labour had already proposed to keep state monitoring of pay arrears besides in 2026.
Financial experts warned
In the autumn of last year, economists warned that the restrictive actions of the central bank choke companies, especially in the face of a sharp economical downturn and a possible recession. “There is simply a large hazard that more and more companies will go bankrupt due to the fact that they are no longer making profits due to advanced interest rates on loans,” Oleg Vjugin, a erstwhile vice president of the Russian central bank, said in early June, and now a associate of the supervisory board of respective Russian corporations. The first signs of bankruptcy in the form of difficulties in paying off liabilities are already apparent.
This is evident not only in the case of problems with wages, but besides in the accelerated growth of outstanding liabilities between companies and yet besides the increase in non-performing loans.
As regards company insolvency, the Moscow Macroeconomic Analysis Centre and Short-term Forecasts (CMASF) directed by the brother of the current Minister of Defence Bielousov pointed to negative dynamics. It besides stated that in 13 of the 37 industries surveyed, working capital could only increasingly be created by expanding supply and service obligations. The most affected is the coal industry, metallurgy, the production of cars, ships and aircraft, but besides the extraction and refining of gas and oil.
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The crisis of insolvency is increasingly mentioned. And the fact that it occurs more frequently in any sectors is related to the striking division of the economy that followed Russian aggression against Ukraine. Experts explain that on the 1 hand, there is simply a military and arms manufacture in Russia, which, like its suppliers, is supported by the state, for example through subsidised loans.
On the another hand, there is the civilian sector, which must cope on its own under fresh conditions. Thus strong economical growth over the last 2 years has mostly been due to the arms sector and generous payments to soldiers and families who died in the war. According to CMASF, the fresh increase in industrial production in May besides results in 2 thirds "from a strong increase in production in sectors where reinforcing products dominate".
Now that The economy as a full slows down and oil export gross has fallen significantly, profits for private companies are decreasing again. Not only the number of corporate insolvency increases, but besides the number of non-performing loans in banks. Although the central bank has lowered its interest rate from 21 percent to 18 percent, conservative currency guards are not willing to lower it more to 15 percent or less. Like this. debt becomes increasingly unbearable – not to mention the deficiency of recovery of investments.
Russian economy needs peace
In its May report, the Russian central bank reported that as many as 13 of the 78 largest corporations in the country have difficulty repaying debt – 7 more than in late June 2024. The Bloomberg news agency at the end of June, citing information from insiders, wrote about "systemic hazard of the banking crisis" over the next 12 months.
According to her interlocutors, Russian banks, which last year achieved evidence profits of 3.8 trillion rubles (18 billion zł), are "more and more afraid about the level of bad loans in their balance sheets". There's talk of a fewer trillion rubles. Bloomberg late added another component to the mosaic: according to authoritative documents, at least 3 banks considered to be systemic consider asking for state financial assistance in the event of a further increase in the number of non-performing loans per year.
Officially, the share of non-performing loans to companies for 1 April was only 4%. As regards unsecured consumer loans late in repayment over 90 days, this percent was 10.5%. The central bank so considers the bankers' concerns to be ‘totally unfounded’.
However, banks themselves are afraid — the quality of credit is far more pessimistic than the officially published data.. “It is already known that it will not be easy said Herman Gref, the head of state and the largest in the country of the Bank of Sbierbank, during the general gathering in June. He added that the quality of loans is deteriorating and that companies must increasingly restructure their debt.
No wonder the economy is hoping for peace in Ukraine. This was repeatedly shown by the surge in stock exchange rates erstwhile U.S. president Donald Trump sent signals in this direction.
— The Russian economy is looking forward to peace," said Władysław Inoziemcew recently. erstwhile Vice president of Oleg Wjugin Central Bank went even further. — From a purely economical point of view, Russia needs peace this year or next year He said.
