Bankruptcies on the Rise in Russia
Bankruptcies on the Rise in Russia

Bankruptcies on the Rise in Russia

Bankruptcies on the Rise in Russia

The number of Russian bankruptcies is rising. Financial Corporation Otkritie, Binbank and airline VIM Avia are just a few of the Russian firms that have gone bust over the summer as the number of companies going to the wall continues to rise this year despite the nascent economic recovery.
Russia has emerged from one of its deepest post-Soviet recessions and put in an expectedly good 2.5% GDP growth in the second quarter of this year. But that is not good enough for many firms still hurting from nearly eight years of economic sloth, intellinews.com reported.
One of the side effects of the slowdown has been a consolidation of many sectors where the leading cash-rich firms have started aggressive price wars that have put their smaller rivals under pressure, leading to a concentration of many sectors in the hands of the market leaders.
Russian economy has entered the trajectory of "fairly stable growth", President Vladimir Putin said on September 24, but with high borrowing costs and anemic growth in real wages the economy is hardly flourishing.
And things are going to get worse for many firms as the majority of Russia’s enterprises remain directly or indirectly dependent on budget spending; as part of the 2018-2020 budget planning many large state-owned enterprises are losing their subsidies, which in turn feed smaller companies with state orders. The state-owned Rosselkhozbank is only the latest state-owned entity to be cut off from its subsidies under the new budget this week.
The number of bankruptcies of legal entities grew for the third consecutive quarter in the second quarter of 2017, according a report from the Center for Macroeconomic Analysis and Short-Term Forecasting, Vedomosti reports. Some 336 companies more companies collapsed in the second quarter of this year than closed in the same period a year earlier–the highest level since 2007.
The growth in the number of bankruptcies is observed in almost all industries, but almost two thirds of all bankrupts are concentrated in three of them: trade, commercial services and construction. More recently the number of bankruptcies has accelerated in the electric power industry, metallurgy, machine building, and the food industry.

Short URL : https://goo.gl/cbw6XT
  1. https://goo.gl/iDBoCY
  • https://goo.gl/ffJzjz
  • https://goo.gl/cpgwyN
  • https://goo.gl/ApVBtP
  • https://goo.gl/mdpCLh

You can also read ...

More and more Thai merchants are integrating WeChat Pay and Alipay’s systems to cater to tourists.
The internet has changed the way most people live. Through...
Cambodia’s economic outlook remains positive, but is subject to downside risks.
The IMF Managing Director Christine Lagarde expressed optimism...
More India Bank Frauds Revealed
Over 25,800 fraud cases involving about Rs179 crore ($1.79...
Qatar Calls to Investigate UAE Bank’s Bogus Deals
Qatar has asked US regulators to investigate the US subsidiary...
Free trade achieves more good for the planet.
US President Donald Trump’s steel tariffs have brought the...
Morocco Currency Reform on Right Track
Few weeks after the launch of the gradual dirham float, the...
EU Readies Tax on US Technological Titans
The European Union will next week unveil plans for a digital...
Apparel imports from ASEAN are growing, spurred by low labor costs  in such countries as Vietnam.
Import prices for apparel and daily goods in Japan plunged...

Add new comment

Read our comment policy before posting your viewpoints