Preprint of the article by the Institute of Economic Forecasting of the Russian Academy of Sciences “Russian enterprises at the end of 2023”: how business endures sanctions

Although Russian enterprises had practically adapted to the sanctions by the end of 2023, their economic consequences are experienced more acutely by business – we are talking about a decrease in the availability of financial and labor resources for business, as follows from the preprint of the article by the Institute of Economic Forecasting of the Russian Academy of Sciences “Russian enterprises at the end of 2023.” Thus, since the spring, the share of enterprises that consider themselves affected by sanctions has remained virtually unchanged – at 60%; 30% see themselves as not affected. At the same time, enterprises began to talk less often about passive adaptation to sanctions (reducing investments, wages, staff) and more often about active adaptation (searching for new suppliers and sales markets, modernizing production).

The share of answers about sanctions problems in the supply of imported raw materials and components (60%), rising import prices (44%) and domestic prices (57%), and general uncertainty in the economy (44%) remain at the same level. Business complaints about export opportunities have intensified, although dissatisfaction with domestic demand has subsided.

According to the survey, one of the main problems of enterprises is the lack of financial resources. Most often, businesses complained about high inflation (34% of responses at the end of 2022 and 54% at the end of 2023), the inability to obtain short-term (10% and 17%) and long-term (14% and 24%) loans. Therefore, the business request to the state looks like this: to restrain the rise in prices for fuel, energy and transport services (66%), reduce the tax and bureaucratic burden (50% and 41%), maintain demand (42%), sharply expand preferential lending (32% ).

According to the Central Bank, enterprises responded to rising lending costs by increasing the issuance of bonds. In December, the volume of the corporate bond market increased by RUB 1.56 trillion. (7%) and by 5 trillion rubles. (26.5%, a record for ten years) for the entire 2023 – up to 23.9 trillion rubles. Reduced financial inclusion for enterprises in the real sector and uncertainty in exchange rate dynamics limit the growth potential of the Russian economy, the authors warn. Thus, a lack of finance aggravates the problem of labor shortage, preventing expansion of hiring (68% complained compared to 55% in the spring) – and increasing labor productivity requires investment in technology and equipment.

Diana Galieva