RSPP: Inflation, supply disruptions, expensive loans among top risks for business, these already partially realized


Amid the current geopolitical and economic situation, large business are most affected by rising prices for foreign and domestic goods, the risk of review of contracts, and disruptions in the supply of components and equipment, according to a survey of business representatives conducted by the Russian Union of Industrialists and Entrepreneurs (RSPP).

The March poll included 108 companies, 70% of which identified themselves as big businesses. Companies were asked to assess the probability of various risks and the degree of their impact on their operations.

The top factors in terms of possible negative impacts include a sharp increase in prices for foreign goods, revision of existing prices and contracts, deterioration of supply conditions or limited supplies of equipment, spare parts and components (including those for which have no domestic counterparts). Companies are fear a sharp rise in prices for domestic goods. More than a third of companies are worried about problems with access to loans, including approved loans, and growth of interest rates.

For 60% of companies, the risk of rising prices for foreign goods has already materialized, and will occur with a high probability for 22% (the risk of rising prices for domestic goods - 41.7% and 36.5%, respectively).

Logistical difficulties with the delivery of purchased raw materials and equipment are already being experienced by 43.2% of companies surveyed (for 26.3% this risk is expected to occur with a high probability), about one third of respondents faced longer delivery times, and almost a quarter are seeing growth in transportation costs.

More than half (51.1%) of companies reported that due to sanctions they are not receiving equipment, spare parts and components from abroad, and for 27.7% of enterprises this risk is highly probable. For a number of types of imported goods, conditions of supply have worsened for 43% of respondents, with one-third of companies expecting likely restrictions on supply in the near future.

Almost 36% of companies mentioned problems with access to loans in Russia as a risk, while a similar 34% cited the risk of not being able to secure financing via foreign banks and Eurobonds.

The execution of payments in foreign currency was accompanied by problems for 30.3% of companies, while the possibility of settlements with foreign counterparties were limited for 26.4% of organizations.