Nearly one in three of Russia’s top companies posted losses in the first half of 2025, the highest share since the Covid-19 pandemic, Russian media reported on Tuesday.
Kremlin-aligned newspaper Izvestia, citing figures from state statistics agency Rosstat, wrote that around 19,000 companies had collectively lost more than five trillion rubles ($62 billion) between January and June.
This year, the share of unprofitable firms grew by 2.3 percentage points to reach 30.4%, the first time that this figure surpassed 30% since the pandemic in 2020.
Analysts speaking to Izvestia attributed the poor results to Western sanctions and inflation driven by bloated military spending, as well as corporate tax increases and steep interest rates from Russia’s Central Bank.
Russia’s Economic Development Ministry blamed “seasonal patterns” for the losses, saying that profits would rebound later in the year, according to The Moscow Times.
The data did not include small and medium-sized firms, financial institutions or state entities.
While sectors linked to the war effort soared, such as defense and engineering firms which reported revenue growth of up to 200%, coal mining, utilities, transportation and research were among the hardest hit.
It comes amid increasing speculation about the frailty of Moscow’s war economy. Earlier this month, Andriy Yermak, the head of Ukraine’s Presidential Office, said that Russia’s budget deficit had risen by $13 billion in July, with the overall deficit this year surpassing $54 billion.
On Aug. 28, the Institute for the Study of War (ISW) wrote that Ukraine’s repeated bombardment of Russian oil facilities, which has sparked widespread shortages and outages, will likely “raise inflation and cause further macroeconomic instability in Russia.”
In June this year, Russia’s Central Bank lowered the key rate from 21% to 20% in the first decrease since October 2024 as a period of growth overheating sparked by massively ramped up military spending gave way to a broader slowdown.
Last week, Bloomberg reported that Russia’s GDP had expanded by just 1.1% over the first seven months of the year, barely meeting the most conservative growth forecasts from the central bank.
US President Donald Trump has threatened sweeping economic retaliation if the Kremlin does not agree to a ceasefire, saying that he could impose 100% tariffs on US imports from countries that continue to buy Russian oil.
Last week, he warned that there could be an “economic war” if Vladimir Putin failed to agree to a ceasefire in Ukraine, saying: “An economic war is going to be bad, and it’s going to be bad for Russia, and I don’t want that.”
On Monday, Sept. 1, US Treasury Secretary Scott Bessent said that “all options are on the table” for pursuing further sanctions against Russia, though nobody from the Trump Administration has yet divulged when economic penalties could come into force.