Russian companies face widespread losses

More than one-third of Russian companies are now operating at a loss, according to the latest data from Rosstat, the federal statistics service. Between January and July 2026, 33% of large and medium-sized companies monitored by Rosstat were in deficit, a figure that has increased by two points compared to the previous year.

Profitability declining across sectors

Those companies that manage to be profitable are earning less money than before. Overall, profits generated by Russian companies have fallen by 16% compared to the previous year. This decline is affecting both individual businesses and entire sectors of the economy.

Year-end bonuses at risk for workers

For Russian workers, this will soon have very concrete consequences. Many of them will not receive the year-end bonus that is normally part of their standard compensation. Nearly half of Russian companies do not plan to pay it, according to a study by the accounting firm Aktion Bukhgalteriya, reported by the Russian edition of Forbes.

Deficit sectors expanding

The difficulties tend to spread within the economy. The number of deficit sectors has almost quadrupled this year, increasing from three to eleven, notes the Russian media Izvestia, citing Rosstat figures. Metallurgy, woodworking, mineral extraction, automotive manufacturing, leisure, and insurance are now considered unprofitable sectors.

Hydrocarbon sector remains resilient

The hydrocarbon sector is one of the few to emerge, along with the food and pharmaceutical industries. The price surge caused by the war in the Middle East has allowed them to withstand the increasing number of Ukrainian attacks on Russian energy infrastructure. Oil and gas producers have accumulated profits of 26.7 billion euros (2,500 billion rubles), according to Rosstat, an increase of 51% compared to the previous year.

High interest rates strain businesses

Interest rates remain high. Russian economists point to the high cost of loans. According to Vladimir Eremkin, a researcher speaking to Izvestia, companies are borrowing from banks at rates approaching 20%. As a result, an increasing portion of their profits is simply swallowed up by interest payments.

Investment decline and rate cuts

High interest rates discourage investment. In the first half of the year, fixed capital investments fell by 10% compared to the previous year, particularly in metallurgy and civil engineering, notes Izvestia. Interest rates exploded in Russia starting in February 2022, just after the invasion of Ukraine, when the Russian Central Bank suddenly pushed its key rates to 20% in an attempt to contain the financial storm.

Tax increases add to pressure

Russian companies also complain about tax increases. As early as last year, the corporate tax rate was raised from 20% to 25%, and the government has created an exceptional 30% tax on "excess" profits of mining companies. Meanwhile, consumers have been hit with a VAT rate increase this year, as Moscow plans to allocate the equivalent of 178 billion euros to defense in 2027, 32% more than in 2026.

Economic forecasts remain cautious

In its latest forecasts, the International Monetary Fund (IMF) estimates growth at 0.9% for 2026 and 2027, significantly less than in 2023 and 2024 when the Russian economy was growing by 4% annually due to massive investments. "This military Keynesianism has reached its limits," estimates researcher Thomas Graham in a note published by the Council on Foreign Relations (CFR), an American think tank.