{"id":286894,"date":"2025-11-27T22:55:04","date_gmt":"2025-11-27T22:55:04","guid":{"rendered":"https:\/\/www.newsbeep.com\/uk\/286894\/"},"modified":"2025-11-27T22:55:04","modified_gmt":"2025-11-27T22:55:04","slug":"russian-industry-sentiment-falls-to-late-1990s-lows-report","status":"publish","type":"post","link":"https:\/\/www.newsbeep.com\/uk\/286894\/","title":{"rendered":"Russian Industry Sentiment Falls to Late-1990s Lows \u2013 Report"},"content":{"rendered":"

Sentiment in\u00a0Russia\u2019s industrial sector fell to levels seen in the late 1990s in November, according to calculations<\/a> by the Institute of Economic Forecasting of the Russian Academy of Sciences (INP RAS).<\/p>\n

The index, tracked since 1993, has only fallen below its current level twice in the past quarter-century, during the 2008-09 global financial crisis and at the height of the Covid-19 pandemic.<\/p>\n

November\u2019s reading marks<\/a> the weakest point since April 2020, when nationwide lockdowns froze much of the economy.<\/p>\n

Industrial output rose<\/a> 3% month-on-month in October after a sharp fall in September. But the year-to-date picture remains subdued, as production grew just 1% over the first 10 months of 2025.<\/p>\n

Sales estimates have worsened, with 66% of firms saying demand was \u201cbelow normal.\u201d That is the highest share since 2009, when GDP contracted 7.9%. It also exceeds the lows of the pandemic and the 2016 downturn, resembling the early 2000s recovery period after Russia\u2019s 1998 default.<\/p>\n

Analysts warn<\/a> that the industrial sector is stuck between stagnation and decline. Growth is concentrated in industries tied to defense procurement and civilian output has been shrinking throughout the year.<\/p>\n

According to the Center for Strategic Research, production is falling<\/a> in 16 of 24 major industrial categories, including several core segments.<\/p>\n

The Center for Macroeconomic Analysis and Short-Term Forecasting (CMASF) says three-quarters of key product categories have registered declines this year.<\/p>\n

Profitability is sliding as companies devote 39% of pre-tax profits to debt servicing, a burden comparable to the shocks of the pandemic and the first months of the full-scale invasion of Ukraine.<\/p>\n

Firms report the same set of pressures: high borrowing costs, weak demand and a strong ruble.<\/p>\n

The Industry and Trade Ministry has warned<\/a> that wood-processing output could fall 20-30% over the next two years.<\/p>\n

Metals and construction executives say state megaprojects are masking underlying weakness but are close to completion, with no clear successors.<\/p>\n

\u201cOur export opportunities are shrinking, and our competitiveness at home is declining,\u201d steel giant Severstal\u2019s main shareholder Alexei Mordashov said<\/a>\u00a0in late October, calling the situation \u201ca consequence of the policy of slowing the economy that we are now seeing.\u201d<\/p>\n

The Center for Strategic Research now sees little chance of avoiding a recession, saying the slowdown is unfolding \u201cfaster and deeper\u201d than anticipated.<\/p>\n

High loan rates, rising taxes and stagnant growth are already shaping the outlook for 2026.<\/p>\n

\u201cWe are at a turning point,\u201d said<\/a> Oleg Vyugin, a professor at Moscow’s Higher School of Economics and former Central Bank deputy governor.<\/p>\n

Extracting the tax revenues planned in the federal budget will be difficult in the current environment, forcing the government into political rather than economic choices, he said.<\/p>\n

Oleg Buklemishev, head of the economic policy research center at Moscow State University, warned<\/a> that the\u00a0economy\u2019s \u201cimmunity\u201d has weakened significantly. The deterioration is likely to continue next year unless the Kremlin confronts the need for a strategic shift, he said.<\/p>\n

\u201cThey haven\u2019t fully recognized the choice they must make, but the warning signs are already there,\u201d he said.<\/p>\n","protected":false},"excerpt":{"rendered":"Sentiment in\u00a0Russia\u2019s industrial sector fell to levels seen in the late 1990s in November, according to calculations by…\n","protected":false},"author":2,"featured_media":286895,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[84,1294,555,56,54,55],"class_list":{"0":"post-286894","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-business","9":"tag-economy","10":"tag-industry","11":"tag-uk","12":"tag-united-kingdom","13":"tag-unitedkingdom"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/286894","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/comments?post=286894"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/posts\/286894\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media\/286895"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/media?parent=286894"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/categories?post=286894"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/uk\/wp-json\/wp\/v2\/tags?post=286894"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}