Russian corporate recovery varies by company profile

Significance

Recovery in the corporate sector is unevenly divided between large and smaller companies. More robust global demand and rising commodity prices boosted the profitability of large exporters, whereas the recovery of small and medium-sized enterprises (SMEs) was delayed by pandemic restrictions and falling real disposable incomes.

Impacts

• High metals prices will constrain investment in infrastructure.
• Rising interest rates will limit capital market borrowing by medium-sized companies.
• Government price controls threaten to undermine private investment in agriculture, metallurgy and chemical production.
• A deterioration in banks' corporate portfolio will be adequately offset by high earnings and previous provisioning.