In Brief

• The obligations of Russian companies to contractors increased by 28% over the year, reaching 155 trillion rubles.
• This is the largest annual increase since 2004, according to Expert RA.
• Companies are delaying payments to suppliers due to a lack of cash and expensive credit.
• The percentage of large companies in arrears has risen from 20.8% to 23.8%.

Record Increase in Debt

The obligations of Russian companies to other enterprises increased by 28% over the year, or by 32 trillion rubles, reaching 155 trillion rubles as of the end of June (Борги російського бізнесу зросли до максимуму за понад 20 років: економіці загрожує криза неплатежів – Espreso) (Так начинается кризис неплатежей. Долги российского бизнеса взлетели до 20-летнего максимума – NV). Data cited by the Expert RA agency indicate that this is the largest annual increase since 2004.

Lack of Funds for Current Operations

Analysts assess the phenomenon as widespread and attribute it to a lack of funds for financing daily operations. Companies facing cash shortages, losses, and expensive credit are increasingly delaying payments to suppliers and partners. They are thus taking advantage of free financing from contractors, which experts say is becoming the main way to acquire capital.

Credit Growth Slower than Debt Growth

Debt between enterprises is accelerating faster than bank lending, which has increased by 12%, and bond financing, which has added 13%. Payment issues are occurring across various sectors of the economy.

Deteriorating Payment Discipline

Payment discipline is weakening among both large and medium-sized companies. Among large enterprises, the percentage of those in arrears has risen from 20.8% to 23.8% over the year. Economists warn that the risk of chain defaults is increasing, where one overdue payment leads to another.