Kateryna Zhiriy20:17, 23.07.26

The largest companies in Russia are massively reducing capital investments due to falling profits and high credit rates.

Russia’s economy has almost stopped growing, with GDP growing by just 0.2% in the first five months of 2026. Despite calls by Russian dictator Vladimir Putin to boost investment, Russia’s largest companies are cutting back on capital spending amid falling profits, high lending rates and economic uncertainty, The Moscow Times reports .

According to Putin, the Russian economy grew by only 0.2% in January-May. This is five times less than in the same period last year, when growth was 1%. And about 20 times slower than in 2023-2024, when, against the backdrop of military production, the Russian economy grew by more than 4% each year.

“The most important task now is to launch a new investment cycle and stimulate structural changes in the domestic economy,” Putin said at a meeting on economic issues.

However, in practice, Russia’s largest state-owned companies and enterprises owned by the country’s richest businessmen are cutting investment programs. According to Rosstat, in the first quarter, fixed capital investment fell by 14.3% – the worst figure since 2009. Deputy Prime Minister Alexander Novak explained that the main contribution to the decline was made by a group of the largest companies, which reduced investments by a total of 307 billion rubles.Read also:

In particular, Novatek almost halved its investment in the Arctic LNG-2 project to 46 billion rubles, down from 87 billion a year earlier. Gazprom reduced its investments from 411 billion to 376 billion rubles, and its investment program for 2026 was reduced by almost a third. Russian Railways is also cutting capital expenditures for the second year in a row.

In addition, the state corporation Rosatom plans to almost halve its investment program – to over 900 billion rubles from 1.66 trillion a year earlier. At the same time, Severstal has cut its investment budget by a quarter.

Despite Putin’s claims about the “stability” of the economy, big business representatives admit that the main obstacle to new projects is the high key rate of the Central Bank of the Russian Federation. It makes loans too expensive and suppresses demand.

Economist Igor Lipsits notes that Russia has practically lost the opportunity to attract foreign capital. According to him, even Chinese investors are in no hurry to invest in the Russian economy, and domestic investments are held back by sanctions, high country risks, and the lack of guarantees for the protection of private property.

An additional problem is the decline in business profits. In the first four months of the year, they decreased by 10.3%, which limits the ability of companies to finance new projects with their own funds.

Economic problems of the Russian Federation – other news

Recall that the Central Bank of Russia has been selling gold from its reserves for the sixth month in a row to cover the federal budget deficit, which reached almost 6 trillion rubles in six months. In June, the central bank’s gold reserves, the fifth largest in the world, decreased by another 9.33 tons, and since the beginning of the year they have “lost weight” by 43.5 tons.

The Russian Federation’s federal budget deficit in 2026 could exceed official plans by more than one trillion rubles ($12.85 billion). In 2025, Russia’s budget deficit exceeded the official figure by almost five times , reaching 5.7 trillion rubles ($74 billion), or 2.6% of GDP. This is the highest level since the 2020 pandemic.

(c)UNIAN 2026