{"id":320719,"date":"2026-03-04T04:08:12","date_gmt":"2026-03-04T04:08:12","guid":{"rendered":"https:\/\/www.newsbeep.com\/il\/320719\/"},"modified":"2026-03-04T04:08:12","modified_gmt":"2026-03-04T04:08:12","slug":"russia-cuts-state-support-for-small-businesses-amid-budget-strain","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/il\/320719\/","title":{"rendered":"Russia Cuts State Support for Small Businesses Amid Budget Strain"},"content":{"rendered":"

State support for Russia\u2019s small and medium-sized businesses (SMEs) fell sharply in 2025, according to calculations<\/a> by the Higher School of Economics\u2019 (HSE) Development Center, as Moscow reins in spending amid mounting budget pressures.<\/p>\n

Small firms account for roughly a fifth of Russia\u2019s economy and employment and are seen as more vulnerable to high borrowing costs and weakening demand.<\/p>\n

Reduced support could deepen strains in a sector already grappling with slower growth and tax increases aimed at financing a budget stretched by military spending.<\/p>\n

The number of SMEs and self-employed people receiving any form of state support dropped 20% year-on-year to 436,700.<\/p>\n

Financial support was cut even more drastically, with total assistance falling 33% to 354 billion rubles ($4.57 billion) and the average amount per recipient declining to 3 million rubles ($38,700) from 4 million rubles ($51,600).<\/p>\n

\t\tnews
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\t\t\t\tRussian Business Optimism Plunges Amid Tax Hike and Rising Costs \u2013 Survey
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The smallest firms were hit hardest, with the number of micro-enterprises receiving support down nearly 22%. Overall coverage of the sector by support measures fell to 2.2% from 3.3%.<\/p>\n

The Central Bank has warned that debt-servicing problems are most acute among SMEs. The sector\u2019s loan book stood at<\/a> 14.75 trillion rubles ($190.3 billion) at the end of the year, with 588 billion rubles ($7.59 billion) overdue.<\/p>\n

Although the share of bad loans declined slightly, the regulator attributed that to a revision of the SME register rather than improved credit quality.<\/p>\n

Business activity remained subdued for most of the year.<\/p>\n

The RSBI small business index stayed<\/a> marginally in positive territory largely due to expectations, while assessments of current conditions including sales have been negative since mid-2024.<\/p>\n

Further pressure is likely this year after the government raised VAT<\/a> to 22% from 20% and lowered the threshold for mandatory VAT payments as part of efforts to plug a budget deficit that reached 5.7 trillion rubles ($73.5 billion) last year.<\/p>\n

Economists say the combination of weaker demand, tighter financing and shrinking state backing could force some of the smallest firms out of the market.<\/p>\n

Read this story in Russian at The Moscow Times’ Russian service.<\/a><\/p>\n

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