russia’s Economy: More Debt and Higher Rates

In 2026, russia’s businesses are seeing fewer profits and more debt, while ordinary citizens’ living expenses keep rising.

In the first half of the year, russian companies’ profits fell by 8.3%. Losses rose by 5% to 5.4 trillion rubles. Net financial results fell by 13.3% to 11.7 trillion rubles. The share of profitable companies dropped to 66.5%. A total of 21,500 enterprises became unprofitable.

Corporate debt exceeded 122 trillion rubles. Overdue accounts receivable rose by 22.5% over the year – to 8.8 trillion rubles. As of August 1, the debts of legal entities and sole proprietors to banks totaled 3.19 trillion rubles. Wage arrears increased by 47.4% over the year, reaching 2.42 billion rubles. Companies spend 36–37% of their profits on interest payments on loans.

Everything is becoming more expensive for the population, particularly utility services. The ministry of economic development of the rf plans to raise their prices by 11% in 2027, 8.6% in 2028, and 7.6% in 2029. Electricity prices for households are expected to rise by 14.4%, 12.1%, and 10.1%, respectively.

The government attributes the rate hikes to the need to repair the utility networks. In 2025, approximately 30% of the heating networks, 41% of the street water mains, and 45% of the sewer networks were in need of replacement. Meanwhile, as of April 1, overdue debt to housing and utilities companies had reached $11.56 billion. Household debt totaled $5.18 billion.

In 2029, the average utility bill will be by 29.7% higher than after the 2026 indexation. Compared to the end of 2024, the increase will be about 60%.

Businesses have less money after paying off loans, and households have less after paying for utilities. At this, both businesses and citizens are accumulating and increasing their overdue payments.