The Russian economy is on the verge of collapse because many companies are facing bankruptcy, writes focus.de.
Russian companies face a crippling debt burden that could lead to a wave of mass corporate bankruptcies, experts warn.
Industries in all areas, including the vital defense sector, are at risk of loan defaults due to record high interest rates, the British publication Express said.
In recent years, many large companies have tried to take advantage of low interest rates to replace Western businesses forced to leave Russia due to sanctions.
However, the Central Bank of the Russian Federation recently raised its key interest rate to an all-time high of 21% in an attempt to bring spiraling inflation under control. Many companies now face serious problems servicing their loans, increasing the risk of default.
This is happening in the ongoing full-scale war that Russia launched against Ukraine in February 2022. Many companies take out new loans to pay off old ones, but this puts them in a spiral from which there is no way out.
Corporate bankruptcies have already increased by more than 20% in the first nine months of this year compared to 2023. and there are fears that the rate could soon rise much higher.
Sergey Chemezov, CEO of the state-owned Rostec corporation, has warned that defense companies could soon go bankrupt en masse if interest rates remain high. Even arms sales do not generate enough profits.
Anton Gerashchenko, a former adviser to Ukraine's Ministry of Internal Affairs, pointed out: “The Russian economy appears to be headed for collapse in 2025. And Putin knows that.“