(Reuters) – Customers failing to pay on time was the leading factor hampering Russian businesses in the third quarter, major business union RSPP said on Friday, as companies grapple with high interest rates and logistics challenges.
The Bank of Russia last week hiked its key interest rate by 200 basis points to 21%, the highest level since the early years of President Vladimir Putin’s rule, and a growing number of Russian industrial companies are warning that prohibitively high borrowing costs may hurt infrastructure development.
Of those who responded to the Russian Union of Industrialists and Entrepreneurs’ (RSPP) quarterly survey of the Russian economy and company activity, almost 37% said non-payments ranked first among operational problems. That compared with 22% in the previous quarter’s survey.
“Compared to the results for the second quarter, the severity of problems increased due to worsening conditions for transporting products, instability on the FX market and rising prices for domestic and imported goods,” the RSPP said.
Payment difficulties with foreign counterparties eased to 21% of respondents, from 28% in the previous quarter.
Russia is grappling with payment issues due to Western sanctions over its February 2022 invasion of Ukraine, particularly for transactions with China.
Several respondents cited labour shortages and the central bank’s high key rate as other problems hindering operations, the RSPP said.
(Reporting by Darya Korsunskaya and Alexander Marrow; Editing by Mike Harrison)
