russian Businesses Under Pressure: Expensive Money, Taxes, and Labor Shortages

In 2026, russia’s economy is entering a phase of “expensive money”,  which is becoming the new norm amid the war against Ukraine and protracted macroeconomic instability. According to signals from the “bank of russia”, the high cost of capital will remain for a long time, forcing businesses to give up inertial planning, cut investments, and tightly control working capital.

russian companies will  have  to review project payback periods, payment deferral terms, and the real cost of borrowed funds. As a result, even with formally stable demand, caution is increasing while  willingness to develop is declining.

Tax policy will deal an additional blow to businesses. From January 1, 2026, russia will apply an increased VAT rate of 22%. This complicates settlements with counterparties, increases the risk of tax disputes, and increases the administrative burden, which is particularly painful for small and medium-sized businesses in a war economy.

The labor market remains tense: there are more vacancies than workers. Low unemployment amid mobilization and demographic losses means increased competition for personnel and pressure on payrolls for companies. At the same time, the expected slowdown in wage growth is forcing businesses to look for alternatives to the “wage race” through automation, feature-shedding, and higher requirements for universal skills.

Problems are also accumulating in logistics. Mandatory electronic document management and tighter regulation of international transportation create risks of delays and inspections. For sellers on marketplaces, the situation is exacerbated by new platform economy rules, higher taxes, and regulatory uncertainty, which sharply increases the cost of any mistake.

Taken together, these factors demonstrate that the economic consequences of the war against Ukraine are increasingly affecting russia’s domestic business environment. Instead of development and investment, companies are forced to focus on survival, legal defense, and risk minimization, which indicates a systemic degradation of the economy in the medium term.