Russia's Corporate Sector Contracts in 2025
Russia's corporate sector shrank at an accelerated pace in 2025. The number of new legal entities fell to 173,000, a 20% drop from 2024. Simultaneously, business liquidations rose by 15% to 233,000. Consequently, the number of companies shutting down exceeded new registrations by 26%. This decline in business activity affected 60 Russian regions, including the major economic hubs of Moscow and St. Petersburg.
Economic Forecasts and Causes of the Decline
The worst performance was seen in residential construction and retail trade. According to a Central Bank of Russia survey, businesses forecast annual inflation for 2026 at 9.3%, while the official Rosstat figure for the previous year was 5.6%. The Central Bank's forecast for the current year is 4-5%, whereas the actual inflation felt by Russians reaches 14.5%. As a result, 2025 was the worst year for Russian trade in the last decade, confirmed by negative business confidence index readings across all four quarters.
This situation has led to over half a million Russian citizens being declared bankrupt, highlighting the depth of financial strain on both businesses and households. According to forecasts, Russia's revenue from energy exports in 2026 may shrink to roughly 22% of all federal budget income, down from a previous 40-50%. Facing a deepening budget crisis, the Russian government has increased tax pressure, and financial analysts predict that up to 30% of private companies may cease operations in the near future. This economic turmoil is unfolding against the backdrop of ongoing international sanctions and a reorientation of trade.
The reasons for the decline in company numbers are systemic. Key factors include:
- A sharp increase in operational costs
- High cost of credit
- Tightened requirements for tax compliance
- Chronic payment delays from counterparties
The combined effect of these factors is draining business liquidity and making legal activity economically unviable. The situation demands urgent government intervention, as it impacts economic stability and public welfare.
The contraction of business activity in Russia reflects serious structural economic problems that could lead to a deeper financial crisis. Government measures aimed at improving the situation may prove insufficient without a comprehensive approach to solving financial and economic challenges. Further escalation of these problems could intensify social tensions within the country.