Large cracks are showing in the Russian economy. Exorbitant interest rates are damaging almost every aspect of the economy as firms default on loans with interest rates greater than 25%.
According to Russian bankers, the construction sector, industry, and companies involved in the military economy are starting to face payment difficulties, and the situation is becoming dangerous.
According to sources, the debt crisis could spread significantly throughout the entire Russian financial system next year.German Gref, CEO of Russia’s largest bank, Sberbank, described the situation as a “perfect storm” at the St. Petersburg International Economic Forum last week.
Andrei Kostin, head of Russia’s second-largest bank, VTB, has said that many companies now have to take on more debt just to be able to pay interest.
According to The Moscow Times, the total debt of Russian companies to the banking system at the beginning of June amounted to 86.2 trillion rubles, which is 65 percent more than at the beginning of 2022, before Russia invaded Ukraine.