Russia Scales Back Support for Small Businesses Amid Budget Strains

cross-posted from: https://lemmy.sdf.org/post/38180003

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Russia has sharply reduced state support for small and medium-sized businesses as it grapples with a widening budget deficit and economic slowdown, raising concerns among economists and business leaders about the sector’s long-term health.

Government subsidies for small and medium-sized enterprises (SMEs) dropped by 43% in the first quarter of 2025 compared with the same period last year, according to a new report by the Higher School of Economics Development Center.

Total assistance fell from 127.8 billion rubles ($1.6 billion) to 72.3 billion rubles ($918 million).

That figure is also lower than the level of support provided in early 2022, shortly after Russia launched its full-scale invasion of Ukraine, when it stood at 75.8 billion rubles ($962 million).

At the same time, the number of SMEs and self-employed individuals receiving government aid declined by 17%, reaching 99,200 recipients.

The cuts reflect a broader shift in the Kremlin’s approach to business support, with planned allocations for the SME sector over the 2025-2030 period totaling 330 billion rubles ($4.2 billion), a 20% reduction from the previous six-year plan.

Lending programs, particularly the popular 1764 initiative that offered subsidized interest rates through commercial banks, have been hit hardest.

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