The Non-payment Crisis Has Affected Almost 40% Of Large Russian Companies

The problem of non-payment has become a major constraint on business activity.

The slowdown in the economy, the strengthening of sanctions and a sharp rise in lending rates have pushed the Russian economy into a non-payment crisis, reports The Moscow Times.

In the third quarter, 39% of large companies faced non-payments from counterparties, according to a survey by the Russian Union of Industrialists and Entrepreneurs, the country's largest business association, which includes more than 100 industry associations from sectors ranging from banks to the fuel and energy sector.

The problem of non-payments has become the main constraint on business activity, the survey shows: the number of companies facing it increased 1.5 times compared to the second quarter, and their share increased by 13 percentage points.

As a result, more entrepreneurs complain about non-payments than about the decrease in demand (34%), lack of funds (32%) or unavailability of loans (32%).

Data from Rosstat confirm: overdue debt of Russian companies to suppliers at the end of August reached 3.841 trillion rubles. Since the beginning of the year, the volume of non-payments has increased by 395 billion rubles (+11%), and if compared to January-2024 - by 993 billion rubles (+35%). 4.52 thousand Russian companies had debts to their counterparties that were not paid on time, and the record-breakers in terms of its volume were manufacturing companies - 1.53 trillion rubles.

The problem of non-payments arose last year, against the backdrop of a high key rate, recalls Natalia Orlova, chief economist at Alfa Bank. Sharp rise in the price of loans led to the fact that the cost of business to pay interest to banks jumped by 83% last year and another 54% in the first half of this year, according to estimates of "Expert RA".

Now the reason for the persistence of non-payments may be a slowdown in the growth of budget expenditures, Orlova points out: oil and gas revenues of the treasury are falling rapidly, non-resource revenues are lagging behind the plan, and the authorities are forced to let civilian spending "under the knife". In order to meet the deficit plan (5.7 trillion rubles), budget expenditures in the fourth quarter should exceed last year's by only 5% against 20% in January-September, Orlova notes.

Small businesses are also facing non-payments - 25% of surveyed companies, according to a July study by Promsvyazbank and Opora Rossii. At the same time, the number of such cases is growing for 15%. What is happening is a consequence of problems with the economy, PSB analysts note: "The aggravation of payment discipline problems may be not so much related to deliberate avoidance of fulfillment of obligations by counterparties, but to financial problems that have arisen".

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