russians Are Losing Confidence in the Economy Faster than the kremlin Can Hide This

Business activity in russia has fallen to the levels seen in the spring of 2022. The business climate index, calculated by the central bank of the rf, dropped to minus 3.6 points in June from 0.9 in May. Zero on this scale marks the line between growth and decline, so businesses no longer believe in an improvement. Both assessments of the current situation and companies’ expectations have worsened, with declines recorded in most sectors and across all categories of enterprises, from large corporations to small businesses.

In parallel, inflation expectations are rising. According to data from the central bank of the rf, companies’ price expectations rose by 4.4% of a point in July, to 20.2% of a point. Less fuel, higher logistics costs, and more expensive goods.

Ordinary russians’ moods are rapidly deteriorating following businesses’ ones. A “levada center”’s poll has revealed a complete lack of optimism regarding personal well-being and the state of the economy as a whole. The consumer sentiment index has been falling for a year and, by the end of June, had dropped below the 100-point mark that separates optimism from pessimism. Over the past year, the index has lost 23 points, with 9 of those points lost in the last two months alone.

Meanwhile, the corporate sector is rapidly sinking into debt. In the first half of the year, the number of legal entities declared bankrupt rose by 10.8%, while the number of new bankruptcy cases increased by 20.9%. Another trend is also telling: companies that have accumulated debt are increasingly announcing their intention to file for bankruptcy. The number of such announcements exceeded the figures of the year 2025 by 43%, and the level of 2024 – by 83%.

Against the background of an economic downturn, the kremlin continues to emphasize the need for labor. minister of labor anton kotyakov has stated that over the next six years, russia’s economy will need approximately three million workers, production plant operators, and machine operators. The question of where these people are supposed to come from in a country with record-low unemployment, high mobilization of men of working age, and mass emigration of skilled professionals remains unanswered.

However, there is one sector that has traditionally been thriving in the rf. russia’s pawnshop market is projected to see a 60% increase in profits in 2026. When people are pawning their belongings just to make it to payday, and businesses are closing shops instead of opening new ones, this is the most accurate indicator of the direction in which the country’s economy is heading.