Russia will expand support to small businesses

Significance

However, small- and medium-sized enterprises (SMEs) play a significant role in the economy, especially in service industries. They also provide a rising share of new jobs. The government wants to incentivise the creation of more SMEs.

Impacts

• SMEs in the manufacturing and technology sectors working towards import substitution will receive preferential support.
• High interest rates will threaten the ability of SMEs to raise sufficient capital to invest in new capacity.
• The weak ruble will push up the price of imported goods, reducing profit margins for SMEs.