Russian economy entering “expensive money” phase amid war in Ukraine, intelligence reports
According to Ukrinform, this was reported by the Foreign Intelligence Service of Ukraine (FISU).
Signals from the Bank of Russia indicate that high capital costs are likely to persist for a long time, forcing businesses to abandon inertia-based planning, cut investments, and tightly control working capital.
Russian companies will have to reconsider project payback periods, payment deferral terms, and the real cost of borrowing.
As a result, even when formal demand remains stable, caution is increasing while willingness to develop is declining.
Tax policies are delivering an additional blow to business.
Since January 1, 2026, Russia has applied an increased VAT rate of 22%. This complicates settlements with counterparties, raises the risk of tax disputes, and increases administrative burdens, which is particularly painful for small and medium-sized businesses in a war economy.
The labor market remains tense, with more vacancies than workers.
Low unemployment amid mobilization and demographic losses means companies face increased competition for personnel and upward pressure on payroll costs. At the same time, the expected slowdown in wage growth is pushing businesses to replace “wage race” with automation, feature-shedding, and higher requirements for universal skills.
Logistics issues are also accumulating. Mandatory electronic document management and tighter regulation of international transportation create risks of delays and inspections. For sellers on marketplaces, the situation is worsened by new platform economy rules, higher taxes, and regulatory uncertainty, sharply increasing the cost of any mistake.
“Taken together, these factors demonstrate that the economic consequences of the war against Ukraine are increasingly affecting Russia’s domestic business environment. Instead of development and investment, companies are forced to focus on survival, legal defense, and risk minimization, which indicates a systemic degradation of the economy in the medium term,” the FISU noted.
As Ukrinform previously reported, for the first time since the start of the full-scale war against Ukraine, the Russian economy has officially been recognized by the Kremlin as having lost momentum and entered a stagnation mode.
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