Companies are seeing a rise in decisions to reduce expenses in their operations
In the face of rising inflation and economic uncertainty, Russian businesses are focusing on cost optimization, according to a report by the Russian Union of Industrialists and Entrepreneurs (RSPP). This shift is driven by a combination of factors, including the need to increase efficiency and reduce labor and operational costs.
The RSPP's survey revealed that 74% of companies are planning to cut costs, an increase from 58% at the beginning of the year. This trend is fueled by expensive loans due to high key interest rates and a simultaneous drop in demand due to reduced consumer lending.
To address these challenges, businesses are turning to automation and digitalization. The Ministry of Industry and Trade is supporting robotization in industrial enterprises through subsidies, preferential loans, and programs to help manufacturers with working capital. This aims to increase production efficiency, reduce the burden on staff, and lower costs.
Moreover, the adoption of Building Information Modeling (BIM) technologies in construction projects, encouraged by government mandates and investments, helps optimize project costs and timelines through digital modeling and automated management systems.
Organizations are also taking measures to reduce expenses. For instance, 30% of companies plan to reduce expenses on raw materials and components, while 93% are optimizing administrative expenses. Additionally, 21% of enterprises intend to optimize expenses on charitable and social programs.
Notably, 18% of companies are reducing labor costs, but Boris Kopekin, chief economist at the Institute of Economic Growth named after P.A. Stolypin, predicts that significant layoffs will mainly occur in the coal industry due to the current labor shortage.
The Central Bank's recent decision to lower the key rate for the first time since 2022, down by 1 percentage point to 20%, is a positive step towards easing the financial burden on businesses. However, the Central Bank did not rule out the possibility of raising the key rate again if inflation stops declining and starts to rise again.
The situation with demand for goods and services deteriorated at the beginning of 2025, after remaining stable throughout 2024, according to the RSPP report. This has led to a decrease in the relevance of Western sanctions and logistics issues, with only 12.8% and 14% of enterprises mentioning them respectively.
In conclusion, the main drivers for cost optimization among Russian businesses are rising inflation pressures on labor and materials, governmental support for automation and digital tools, and a strategic focus on improving productivity and financial planning. The corporate credit portfolio is expected to grow by 8-13% by 2025, while retail lending will increase by only around 1-6%. Despite these challenges, businesses remain resilient, adapting and innovating to navigate the current economic climate.
[1] RSPP Report on Cost Optimization Trends Among Russian Businesses [2] Ministry of Industry and Trade's Support for Robotization in Industrial Enterprises [3] Government Investments in BIM Technologies for Construction Project Optimization
- Amidst rising inflation and economic uncertainty, Russian businesses are concentrating on cost optimization, as revealed in the RSPP Report on Cost Optimization Trends Among Russian Businesses.
- To address the challenges faced, businesses are turning to automation and digitalization, a strategy supported by the Ministry of Industry and Trade through subsidies, preferential loans, and programs for working capital, as explained in the Ministry of Industry and Trade's Support for Robotization in Industrial Enterprises.
