The Russian economy and companies' performance in Q1 2025

The Russian economy and companies' performance in Q1 2025 showed a decline in demand, with 38.4% of surveyed organizations experiencing a decrease. Inaccessibility of borrowed funds, lack of working capital, and non-payments by counterparties were the main constraints on Russian enterprises' activities. Currency instability negatively impacted 17.4% of companies in Q1.

Growing fiscal burden and worsening conditions of supply of raw materials and components hindered the work of 14% of surveyed enterprises. 12.8% of cases noted the negative impact of sanctions from Western countries, as well as problems in logistics.

Almost three quarters of companies intend to cut costs in the current environment to improve efficiency of their operations. Implementation of energy-saving and resource-saving technologies and digitalization projects were mentioned by 34.1% and 29.4% of respondents, respectively. One fifth of surveyed enterprises plan to maintain or increase the volume of investment programs, while 15.3% are ready to reduce their investment plans.

16.5% of organizations are going to raise prices in the current conditions, and 16.5% also reported about the planned development of programs to replace imported products. 15.3% of cases indicated that they plan to give up advance payments to suppliers, and 12.9% of organizations are going to start demanding advance payments from buyers.

14.1% of companies want to intensify production in the future, and 12.9% will proceed to change the cost structure of the enterprise without reducing output and volume of costs. Less than a tenth of respondents reported that they plan to reorient their exports to markets that have not joined the sanctions against Russia, possibly to produce other products or even reduce production volumes.

The overwhelming majority of surveyed companies (93.2%) plan to reduce costs for administrative and general business needs.  More than half of all organizations intend to cut expenses on consumed services. Survey participants have significantly more frequently noted this option—in the previous reporting period, its share was 37 percentage points. Primarily, companies that intend to reduce personnel expenses plan to limit themselves to cutting hiring.

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